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Sulphur-heavy Fuels Flow as Nigeria, Others Defer Ban

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  • Sulphur-heavy Fuels Flow as Nigeria, Others Defer Ban

Nigeria and several other West African states are not expected to implement rules banning imports of sulphur-heavy fuels until December 1 at the earliest after missing summer deadlines, drawing the ire of health campaigners pushing for cleaner air.

Nigeria, Togo, Ivory Coast and Benin promised in late 2016 to ban the use of fuel packed with sulphur that is a major air pollutant, particularly in cities.

Such fuel has long been illegal in Western nations and is increasingly outlawed in the developing world. But deadlines for bans in the four West African states keep being pushed back.

Ghana is the only regional state that has delivered on a pledge and codified rules preventing the import or transport of high sulphur gasoline or diesel.

“The clean fuels lobby declared victory a bit too soon,” Reuters quoted Energy Aspects analyst, James McCullagh, as saying, adding, “This is ultimately a complicated and sensitive decision about politics, the gasoline pump price cap, subsidies and investment in public health.”

Nigeria, the region’s biggest fuel consumer, missed a July 1 deadline and instead launched a task force to examine the issue. The country produces oil but lacks refining capacity so has to import most oil products.

An official of Nigeria’s Environment Ministry told Reuters that the task force aimed to advise the government on a new standard by late September, with new rules possible by December 1.

The United Nations Environment Programme, which has joined health campaigners pressing for change, said smaller nations, Togo and Benin, were waiting for Nigeria to act, while Ivory Coast had not progressed at all.

The five nations had promised cleaner fuel rules under pressure from campaign group, Public Eye, which criticised them and international trade houses for allowing cars, trucks and households to burn fuels banned in much of the rest of the world.

Ghana followed up by slashing sulphur content to 50 parts per million for imported petrol and diesel, from 1,000ppm and 3,000ppm.

The Standards Organisation of Nigeria, which writes import rules, proposed caps of 50ppm for diesel and 150ppm for petrol. The Nigerian National Petroleum Corporation included prices for them in contracts to swap oil for products – at a cost of at least $25 a tonne more.

But Nigeria did not codify the standards in law, or issue new specifications to importers.

“As it stands, the status quo remains,” one Nigerian fuel importer said, adding “nothing at all” had come from government.

Campaigners are struggling to keep the issue on the public agenda. David Ugolor, a Nigeria-based campaigner who worked with Public Eye, said the cause lacked “someone with a strong political position” to implement the rules. He said the group was looking for ways to put pressure on suppliers.

The NNPC contracts showed 150ppm gasoline would cost anywhere from $20-$30 per tonne more than fuel with higher sulphur, while lower sulphur diesel would add just $10-$15 a tonne, McCullagh said. Because Nigerian gasoline prices are capped, the government would have to raise prices for consumers or shoulder the extra cost.

Given the higher cost of cleaner gasoline, campaigners said Nigeria might only introduce stricter rules for diesel.

“Gasoline (petrol) is the most consumed product, so that wouldn’t necessarily solve the pollution problem,” said David Bleasdale, executive director of consultancy firm, CITAC, saying Nigerian gasoline consumption was about 323,055 barrels per day in 2016 compared with 71,657bpd of distillates, such as diesel.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

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The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

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IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

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South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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