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Medview Spends N22bn on Aviation Fuel in 5 Years

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  • Medview Spends N22bn on Aviation Fuel in 5 Years

Nigeria’s major domestic carrier, Medview Airline, has said that due to the high cost of aviation fuel in Nigeria, it spent about N22 billion on the product in the last five years.

The airline also said that in an effort to streamline its operations, it had to lay off 52 members of staff from both technical and administrative areas of its operation.

The Managing Director of the airline, Alhaji Muneer Bankole, in a press conference at the weekend, said the high cost of aviation fuel in Nigeria was depleting airlines’ little profit, adding that the airlines were at the receiving end of all the bureaucracies the commodity go through before being sold to operators.

Bankole noted that the prices of the product increase anytime it becomes scarce and due to the hiccups in the supply of aviation fuel to different parts of the country, there is no uniformity, adding that fuel marketers sell at arbitrary prices as the product is deregulated.

“We now buy a litre of aviation fuel at N220 in Lagos but up in the North in places like Maiduguri, it is about N260. That is the unfortunate situation we have found ourselves,” he said.

He said that the perennial shortage of aviation fuel, coupled with the gridlock faced in moving the product have become a clog in the wheel of domestic airlines as they find it difficult to operate smoothly like their counterparts in other parts of the world.

Bankole also said that the price of the product is critical to an airline and also considering the fact that fuel consumption amounts to about 30 per cent of the cost of operation for an airline, there is need to quickly find more reliable ways to ensure the supply and distribution of the product.

He also confirmed that the airline has sacked about 52 workers due to the company’s plan to reconsolidate and streamline its operations, remarking that the rationalisation exercise is continuous.

Contrary to the reports that the airline leased all its aircraft fleet, the Medview Managing Director said the airline owns the four aircraft currently in its fleet, adding that two of them have been taken out for maintenance.

According to him, “Since we started operations in 2012, we have airlifted 2.8 million passengers, we are very committed to our work, we are safety conscious, there had been no serious incident or accident, we are still operating to our Francophone West African countries.

“We currently have four airplanes and Medview owns all because the best way to survive is to own your assets. The aircraft were bought with our money, we were attracted to First Bank by our prudence and with our cash flow, we purchased these aircraft through the bank, we have the bill of sale. In 2015, we bought the B737-500 (5N-BQM) and again, we bought another one christened Abeke and that is currently being reconfigured from 221 to 242 capacity.”

Meanwhile, the Kenya Airways at the weekend laid off 22 out of 26 of its Nigerian personnel representing 86.4 per cent of the affected workers.

A source close to the airline disclosed that the staff were issued the disengagement letters at the airline’s office in Lagos in the presence of stern-looking police officers who were engaged by the airline to scare away the affected staff and prevent a possible breakdown of law and order.

Only four of its Nigerian workers were retained by the management of the airline after the purging exercise and these include the Country Manager, Mr. Afeez Balogun, the Station Manager, and two other members of staff.

Report indicated that the sacked workers were only given four weeks wages on disengagement by the management.

It was also gathered that the abrupt sack of the Nigerian workers happened when the airline was still negotiating the new condition of service with the industry unions.

The source said the carrier’s management took the decision without taking into consideration the Nigeria labour laws, which kicks against unilateral decision by employers when disengaging workers.

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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Gold

Gold Steadies After Initial Gains on Reports of Israel’s Strikes in Iran

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Gold, often viewed as a haven during times of geopolitical uncertainty, exhibited a characteristic surge in response to reports of Israel’s alleged strikes in Iran, only to stabilize later as tensions simmered.

The yellow metal’s initial rally came on the heels of escalating tensions in the Middle East, with concerns mounting over a potential wider conflict.

Spot gold soared as much as 1.6% in early trading as news circulated regarding Israel’s purported strikes on targets in Iran.

This surge, reaching a high of $2,400 a ton, reflected the nervousness pervading global markets amidst the saber-rattling between the two nations.

However, as the day progressed, media reports from both countries appeared to downplay the impact and severity of the alleged strikes, contributing to a moderation in gold’s gains.

Analysts noted that while the initial spike was fueled by fears of heightened conflict, subsequent assessments suggesting a less severe outcome helped calm investor nerves, leading to a stabilization in gold prices.

Traders had been bracing for a potential Israeli response following Iran’s missile and drone attack over the weekend, raising concerns about a retaliatory spiral between the two adversaries.

Reports of an explosion in Iran’s central city of Isfahan further added to the atmosphere of uncertainty, prompting flight suspensions and exacerbating market jitters.

In addition to geopolitical tensions, gold’s rally in recent months has been underpinned by other factors, including expectations of US interest rate cuts, sustained central bank buying, and robust consumer demand, particularly in China.

Despite the initial surge followed by stabilization, gold remains sensitive to developments in the Middle East and broader geopolitical dynamics.

Investors continue to monitor the situation closely for any signs of escalation or de-escalation, recognizing gold’s role as a traditional safe haven in times of uncertainty.

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Commodities

Global Cocoa Prices Surge to Record Levels, Processing Remains Steady

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Cocoa futures in New York have reached a historic pinnacle with the most-active contract hitting an all-time high of $11,578 a metric ton in early trading on Friday.

This surge comes amidst a backdrop of challenges in the cocoa industry, including supply chain disruptions, adverse weather conditions, and rising production costs.

Despite these hurdles, the pace of processing in chocolate factories has remained constant, providing a glimmer of hope for chocolate lovers worldwide.

Data released after market close on Thursday revealed that cocoa processing, known as “grinds,” was up in North America during the first quarter, appreciating by 4% compared to the same period last year.

Meanwhile, processing in Europe only saw a modest decline of about 2%, and Asia experienced a slight decrease.

These processing figures are particularly noteworthy given the current landscape of cocoa prices. Since the beginning of 2024, cocoa futures have more than doubled, reflecting the immense pressure on the cocoa market.

Yet, despite these soaring prices, chocolate manufacturers have managed to maintain their production levels, indicating resilience in the face of adversity.

The surge in cocoa prices can be attributed to a variety of factors, including supply shortages caused by adverse weather conditions in key cocoa-producing regions such as West Africa.

Also, rising demand for chocolate products, particularly premium and artisanal varieties, has contributed to the upward pressure on prices.

While the spike in cocoa prices presents challenges for chocolate manufacturers and consumers alike, industry experts remain cautiously optimistic about the resilience of the cocoa market.

Despite the record-breaking prices, the steady pace of cocoa processing suggests that chocolate lovers can still expect to indulge in their favorite treats, albeit at a higher cost.

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Crude Oil

Dangote Refinery Leverages Cheaper US Oil Imports to Boost Production

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The Dangote Petroleum Refinery is capitalizing on the availability of cheaper oil imports from the United States.

Recent reports indicate that the refinery with a capacity of 650,000 barrels per day has begun leveraging US-grade oil to power its operations in Nigeria.

According to insights from industry analysts, the refinery has commenced shipping various products, including jet fuel, gasoil, and naphtha, as it gradually ramps up its production capacity.

The utilization of US oil imports, particularly the WTI Midland grade, has provided Dangote Refinery with a cost-effective solution for its feedstock requirements.

Experts anticipate that the refinery’s gasoline-focused units, expected to come online in the summer months will further bolster its influence in the Atlantic Basin gasoline markets.

Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, noted that Dangote’s entry into the gasoline market is poised to reshape the West African gasoline supply dynamics.

Despite operating at approximately half its nameplate capacity, Dangote Refinery’s impact on regional fuel markets is already being felt. The refinery’s recent announcement of a reduction in diesel prices from N1,200/litre to N1,000/litre has generated excitement within Nigeria’s downstream oil sector.

This move is expected to positively affect various sectors of the economy and contribute to reducing the country’s high inflation rate.

Furthermore, the refinery’s utilization of US oil imports shows its commitment to exploring cost-effective solutions while striving to meet Nigeria’s domestic fuel demand. As the refinery continues to optimize its production processes, it is poised to play a pivotal role in Nigeria’s energy landscape and contribute to the country’s quest for self-sufficiency in refined petroleum products.

Moreover, the Nigerian government’s recent directive to compel oil producers to prioritize domestic refineries for crude supply aligns with Dangote Refinery’s objectives of reducing reliance on imported refined products.

With the flexibility to purchase crude using either the local currency or the US dollar, the refinery is well-positioned to capitalize on these policy reforms and further enhance its operational efficiency.

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