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Private Refineries’ll Improve Petroleum Products, Production –Baru

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NNPC - Investors King
  • Private Refineries’ll Improve Petroleum Products, Production –Baru

The Group Managing Director, Nigerian National Petroleum Corporation, Maikanti Baru, has said that the combined efforts of the NNPC and output from private refineries will impact positively on production of petroleum products.

Baru said this through the Managing Director, Port Harcourt Refining Company, Shehu Malami, at the foundation laying of the Azikel Refinery, Obunagha in Gbarain, Yenagoa Local Government Area of Bayelsa State.

The foundation laying of Azikel Petroleum, one of the 22 private refineries granted licences by President Muhammadu Buhari, was performed by former President Olusegun Obasanjo last Saturday.

“I am optimistic that the combined effort of the NNPC and output from private refineries will impact positively on capacity for production of petroleum products in the country,” the NNPC boss stated.

Baru commended the President of Azikel Group of Companies, Dr. Azibapu Eruani, for the remarkable pace of work at the Azikel Refinery site.

He expressed optimism that the refinery construction would be completed soon to begin onward dispensing of refined petroleum products to the public.

He said work on the perimeter fencing, loading gantry, security unit and the administrative building had attained appreciable level of completion.

Baru pointed out that the 12,000 barrels per stream day (bpsd) hydro-skimming refinery would produce petrol, diesel, aviation fuel, liquefied petroleum gas and heavy fuel oil.

The NNPC GMD lauded the signing of the Certificate of Occupancy by Governor Seriake Dickson of Bayelsa State for the Azikel Refinery and Azikel Power Project.

He noted that of the 22 refinery licences granted by President Buhari, Azikel Refinery was at the forefront of making Nigeria to attain self-sufficiency in petroleum products.

He said that the net exportation of petroleum products target would be met in 2019 and that more Greenfield refineries would make Nigeria a dependable economy.

Baru noted that with synergy with the private refineries, particularly the Azikel Refinery, the hydra-dreaded problems of fuel scarcity, long vehicular queues and importation would end soon.

He commended Eruani for building a new private refinery, praying that the laudable steps taken would motivate and serve as a veritable road map for others to join in the onerous task of industrialising the nation.

Meanwhile, Governor Dickson has demanded that more oil blocks should be given to the oil-producing areas because they are ‘the ancestral properties of Niger Delta.’

He also called on the multinational oil companies to heed the directive by Vice-President Yemi Osinbajo to relocate to the Niger Delta producing the crude oil.

The governor said, “We need more of this investment for our people to be part of it. At anytime I have the opportunity as a governor of a federating unit, I will use the opportunity to commend President Muhammadu Buhari and tell him that we need more.

“We are talking of ownership of oil blocks because that is a legitimate demand. We are yet to see the demand and directive by the Federal Government that oil companies should relocate to the Niger Delta. I don’t know of any business which justifies pipelines criss-crossing several areas for building refineries while they haven’t built refineries from the source of crude oil.

“In all the all-producing areas around the world, the activities of those companies are located where the resources come from. We must examine our own conduct and what we do. We are waiting for the oil blocks. What the Nigerian government sits down and calls oil blocks are in fact the ancestral properties of the Niger Delta. They are pieces of our ancestral properties. We are not saying other should not be included. But if we are not included, it will be wrong.”

Dickson commended Obasanjo, whose government he said gave Bayelsa State two (indigenous) oil blocks.

“The investment will take off all the stress and pressure on us. I have signed the Certificate of Occupancy for 99 years in line with the Land Use Act. I do this every week and one of the first things I did when I came to office was to liberalise land,” he added.

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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Energy

Egypt Increases Fuel Prices by 15% Amid IMF Deal

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Petrol - Investors King

Egypt has raised fuel prices by up to 15% as the country looks to cut state subsidies as part of a new agreement with the International Monetary Fund (IMF).

The oil ministry announced increases across a variety of fuel products, including gasoline, diesel, and kerosene.

However, fuel oil used for electricity and food-related industries will remain unaffected to protect essential services.

This decision comes after a pricing committee’s quarterly review, reflecting Egypt’s commitment to align with its financial obligations under the IMF pact.

Egypt is in the midst of recalibrating its economy following a massive $57 billion bailout, orchestrated with the IMF and the United Arab Emirates.

The IMF, which has expanded its support to $8 billion, emphasizes the need for Egypt to replace untargeted fuel subsidies with more focused social spending.

This is seen as a crucial component of a sustainable fiscal strategy aimed at stabilizing the nation’s finances.

Effective immediately, the cost of diesel will increase to 11.5 Egyptian pounds per liter from 10.

Gasoline prices have also risen, with 95, 92, and 80-octane types now costing 15, 13.75, and 12.25 pounds per liter, respectively.

Despite the hikes, Egypt’s fuel prices remain among the lowest globally, trailing only behind nations like Iran and Libya.

The latest increase follows recent adjustments to the price of subsidized bread, another key staple for Egyptians, underscoring the government’s resolve to navigate its economic crisis through tough reforms.

While the rise in fuel costs is expected to impact millions, analysts suggest the inflationary effects might be moderate.

EFG Hermes noted that the gradual removal of subsidies and a potential hike in power tariffs could have a relatively limited impact on overall consumer prices.

They predict that the deceleration in inflation will persist throughout the year.

Egypt’s efforts to manage inflation have shown progress, with headline inflation slowing for the fourth consecutive month in June.

This trend offers a glimmer of hope for the government as it strives to balance economic stability with social welfare.

The IMF and Egyptian officials are scheduled to meet on July 29 for a third review of the loan program. Approval from the IMF board could unlock an additional $820 million tranche, further supporting Egypt’s economic restructuring.

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Crude Oil

Oil Prices Rise on U.S. Inventory Draws Despite Global Demand Worries

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Oil

Oil prices gained on Wednesday following the reduction in U.S. crude and fuel inventories.

However, the market remains cautious due to ongoing concerns about weak global demand.

Brent crude oil, against which Nigerian crude oil is priced, increased by 66 cents, or 0.81% to $81.67 a barrel. Similarly, U.S. West Texas Intermediate crude climbed 78 cents, or 1.01%, to $77.74 per barrel.

The U.S. Energy Information Administration (EIA) reported a substantial decline in crude inventories by 3.7 million barrels last week, surpassing analysts’ expectations of a 1.6-million-barrel draw.

Gasoline stocks also fell by 5.6 million barrels, while distillate stockpiles decreased by 2.8 million barrels, contradicting predictions of a 250,000-barrel increase.

Phil Flynn, an analyst at Price Futures Group, described the EIA report as “very bullish,” indicating a potential for future crude draws as demand appears to outpace supply.

Despite these positive inventory trends, the market is still wary of global demand weaknesses. Concerns stem from a lackluster summer driving season in the U.S., which is expected to result in lower second-quarter earnings for refiners.

Also, economic challenges in China, the world’s largest crude importer, and declining oil deliveries to India, the third-largest importer, contribute to the apprehension about global demand.

Wildfires in Canada have further complicated the supply landscape, forcing some producers to cut back on production.

Imperial Oil, for instance, has reduced non-essential staff at its Kearl oil sands site as a precautionary measure.

While prices snapped a three-session losing streak due to the inventory draws and supply risks, the market remains under pressure.

Factors such as ceasefire talks between Israel and Hamas, and China’s economic slowdown, continue to weigh heavily on traders’ minds.

In recent sessions, WTI had fallen 7%, with Brent down nearly 5%, reflecting the volatility and uncertainty gripping the market.

As the industry navigates these complex dynamics, analysts and investors alike are closely monitoring developments that could further impact oil prices.

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Commodities

Economic Strain Halts Nigeria’s Cocoa Industry: From 15 Factories to 5

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cocoa-tree

Once a bustling sector, Nigeria’s cocoa processing industry has hit a distressing low with operational factories dwindling from 15 to just five.

The cocoa industry, once a vibrant part of Nigeria’s economy, is now struggling to maintain even a fraction of its previous capacity.

The five remaining factories, operating at a combined utilization of merely 20,000 metric tons annually, now run at only 8% of their installed capacity.

This stark reduction from a robust 250,000 metric tons reflects the sector’s profound troubles.

Felix Oladunjoye, chairman of the Cocoa Processors Association of Nigeria (COPAN), voiced his concerns in a recent briefing, calling for an emergency declaration in the sector.

“The challenges are monumental. We need at least five times the working capital we had last year just to secure essential inputs,” Oladunjoye said.

Rising costs, especially in energy, alongside a cumbersome regulatory environment, have compounded the sector’s woes.

Farmers, who previously sold their cocoa beans to processors, now prefer to sell to merchants who offer higher prices.

This shift has further strained the remaining processors, who struggle to compete and maintain operations under the harsh economic conditions.

Also, multiple layers of taxation and high energy costs have rendered processing increasingly unviable.

Adding to the industry’s plight are new export regulations proposed by the National Agency for Food and Drug Administration and Control (NAFDAC).

Oladunjoye criticized these regulations as duplicative and detrimental, predicting they would lead to higher costs and penalties for exporters.

“These regulations will only worsen our situation, leading to more shutdowns and job losses,” he warned.

The cocoa processing sector is not only suffering from internal economic challenges but also from a tough external environment.

Nigerian processors are finding it difficult to compete with their counterparts in Ghana and Ivory Coast, who benefit from lower production costs and more favorable export conditions.

Despite Nigeria’s potential as a top cocoa producer, with a global ranking of the fourth-largest supplier in the 2021/2022 season, the industry is struggling to capitalize on its opportunities.

The decline in processing capacity and the industry’s current state of distress highlight the urgent need for policy interventions and financial support.

The government’s export drive initiatives, aimed at boosting the sector, seem to be falling short. With the industry facing over N500 billion in tied-up investments and debts, the call for a focused rescue plan has never been more urgent.

The cocoa sector remains a significant part of Nigeria’s economy, but without substantial support and reforms, it risks falling further into disrepair.

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