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Workers Oppose 5% Petrol Levy, Power Sector Privatisation

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  • Workers Oppose 5% Petrol Levy, Power Sector Privatisation

Nigerian workers on Tuesday kicked against the introduction of a five per cent levy on the Premium Motor Spirit, popularly called petrol, as proposed in the Petroleum Industry Governance Bill that was passed recently by the National Assembly.

Speaking under the aegis of the Trade Union Congress and the Nigeria Labour Congress as they commemorated the 2018 May Day, the workers also stated that the privatisation of the power sector had failed.

The President, TUC, Bobboi Kaigama, stated that the union was totally against the five per cent levy on the PMS, as he argued that the move was ill-timed.

In April, the Senate passed the harmonised version of the PIGB, which seeks to unbundle the Nigerian National Petroleum Corporation and merge its subsidiaries such as the Department of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency into one entity.

The proposed law seeks to establish the Petroleum Equalisation Fund “into which shall be paid all monies payable to the Equalisation Fund, including a five per cent fuel levy in respect of all fuel sold and distributed within the federation, which shall be charged subject to the approval of the minister (of petroleum resources).”

Commenting on the issue in his May Day message, Kaigama said, “We are against the five per cent fuel levy hidden in the PIGB. The question is, why is it coming now that Nigerians are going through excruciating pains from the mismanagement of the economy?

“What is the necessity of the marginal levy when Nigeria has not fully broken the shackles of fuel scarcity? If the National Assembly cannot lessen our burden, they should not make it worse. That levy has to be removed immediately. The excuse that the money will be used to fund the Petroleum Equalisation Fund is not tenable.”

On the privatisation of the power sector, the TUC stated that the country’s “future still looks bleak and gloomy.”

It added, “The investors have failed in most of their undertakings so far and are even arm-twisting the government to cover up their failure. We urge the government to hold these investors to account and stop treating them with kid gloves.

“They must comply with the agreement they signed in their contracts with the Bureau of Public Enterprises. Excuses must stop. The contracts should be reviewed immediately. We need real investors to take over the power sector. This so-called privatisation has failed.”

On his part, the NLC President, Ayuba Wabba, stated that Nigerians were yet to see the fulfilment of promises of efficient service delivery since the privatisation of the electricity distribution arm of the power sector.

He said, “Instead, things have gone worse with chronic failures by the Discos to supply prepaid meters, exploitation of Nigerians through estimated billings and reluctance to attend to the simplest complaints by electricity consumers.

“The Federal Government should stop any action plan that will further give money to non-performing privatised electricity distribution companies in Nigeria. We also call on the government to massively invest in the energy mix of hydro, solar and nuclear to drive industrialisation. In this regard, we wish to call for a reduction of duties on solar panels and other solar products instead of the recent increase of these duties.”

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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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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