- Fraud Allegation Rocks Nigeria’s LPG Sub-sector
The Nigeria Liquefied Petroleum Gas Association (NLPGA) is fighting an integrity battle to regain the confidence of its global body – World LPGA, the government and the public.
This is coming after its planned fifth Africa LPG Summit 2018 scheduled for June 19 and 20 in Lagos failed as a result of alleged misappropriation of funds set aside for the summit.
The botched summit would have been the first in Nigeria as the first and second summits were successfully held in Nairobi, Kenya in 2014 and 2015, the third in Tanzania in 2016, the fourth in Johannesburg, South Africa last year and the fifth in Nigeria but which eventually flopped.
At a fact-finding stakeholders’ meeting in Lagos to discuss the issue, the members noted that there is a huge reputation challenge before them, which requires urgent solution.
According to a report on the failed Africa LPG Summit, members of NLPGA stated that the Association broached the idea of hosting the summit in Nigeria after South Africa and mandated the Executive Secretary of NLPGA, Mr. Joseph Eromosele to drive the planning and work with the acting Director of the LPG summit, Vincent Choy. Eromosele was supposed to arrange visas for those coming from outside Nigeria as well as make arrangements for the speakers, pecial guests of honour, accommodations, exhibition and conference spaces.
Unfortunately, the money paid by member-companies and affiliates of NLPGA for the venue, hotel accommodation of some VIPs, as well as cash transferred to Eromosele were allegedly diverted by him.
NLPGA Deputy President, Mr. Felix Ekundayo, told the LPG stakeholders that the association discovered the fraud committed by Eromosele when the intending participants who paid could not access their bookings online and reported to the association’s executive.
Ekundayo said the executives of the association at various meetings asked Eromosele about the summit, but he was always coming up with excuses. “When we heard about the issue, we constituted an emergency meeting. Eromosele was immediately cut off from all communications and all the platforms of the NLPGA, and sent out disclaimers,” he said.
He noted that Eromosele had been suspended, and the case reported to the police, adding that the Special Fraud Unit of the Police would take up the investigation after required processes are completed.
This was also confirmed by other top officials of the NLPGA. Ekundayo further said $11,000 has been recovered from Eromosele so far.
According to the report available, the organisers of the Africa LPG Summit, All Events Group Pte Limited, was working with Eromosele through Vincent Choy, who collected and transferred the money to Eromosele.
The report also said Eromosele advised intending foreign participants to apply for a visa on arrival (VoA) and that they should submit applications of over 70 participants. “Up to the day of our flight, the 15th June 2018, the letter of approval for the visas was not issued and we were forced to cancel our flight.
“We advised all the participants who had been relying on NLPGA to organise the VoA that they were not now going to be available, and we had no option but to cancel the event.
“All the other exhibitors and speakers who were asked to apply for their own visas because they submitted their applications late were able to obtain their visas,” the report quoted the intending foreign participants as saying.
The report also said the organisers noted that NLPGA President, Mr. Nuhu Yakubu, was unaware that the association had been working with them as a co-organiser.
The report said: “The VIPs, including the Minister of State for Petroleum Resources whom Eromosele, has confirmed and asked us to pay for his accommodation, had no knowledge that the event was taking place.
“Several other speakers who were confirmed by Eromosele to be on the agenda were also unaware they were on the agenda. We highly suspect that the executive secretary of the NLPGA was acting alone and that the visas were not submitted properly to the immigration office and all the planning for the event we thought was in place, had not been done.
“As a result, we were forced to cancel/postpone the event and suffer significant costs and claims from exhibitors for cancelled flights and other costs because they had been unable to travel.
“Also, the funds which have already been transferred to Eromosele, the executive secretary of the NLPGA, are at this moment unaccounted for,” the report added.
The vice president, eminent industry chiefs, such as the Minister of State for Petroleum Resources and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), among others, said they were unaware of the summit, with all the loopholes in the planning, the summit was cancelled.
The participants at the stakeholders’ meeting were not convinced by the presentations of the NLPGA executives, noting that they have failed for allowing an employee of the Association to drag its name and integrity in the mud nationally and internationally.
The stakeholders agreed on setting up a five-man committee cutting across all the segments of the LPG sub-sector.They include Mr. Gbenga Falusi, Chairman, Jacob Wale Coker, Mr. George Ebubechukwu and Mr. Monday Nwatu.
It was learnt that the money allegedly misappropriated by Eromosele ran into tens of millions of naira and the Singaporean, Choy, who was working with him to facilitate the participation of foreigners at the summit, according to the stakeholders, was naïve to have placed his trust on just one individual (Eromosele) for the event. With multiple red flags happening throughout the organisation of the event, more due diligence should have been conducted and further clarification sought from the association.
Choy has resigned as a result of the fraudulent transactions.
Oil Prices Recover Slightly Amidst Demand Concerns in U.S. and China
Oil Prices Continue Slide as Market Skepticism Grows Over OPEC+ Cuts
Global oil markets witnessed a continued decline on Wednesday as investors assessed the impact of extended OPEC+ cuts against a backdrop of diminishing demand prospects in China.
Brent crude oil, the international benchmark for Nigerian crude oil, declined by 63 cents to $76.57 a barrel while U.S. WTI crude oil lost 58 cents to $71.74 a barrel.
Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed to maintain voluntary output cuts of approximately 2.2 million barrels per day through the first quarter of 2024.
Despite this effort to tighten supply, market sentiment remains unresponsive.
“The decision to further reduce output from January failed to stimulate the market, and the recent, seemingly coordinated, assurances from Saudi Arabia and Russia to extend the constraints beyond 1Q 2024 or even deepen the cuts if needed have also fallen to deaf ears,” noted PVM analyst Tamas Varga.
Adding to the unease, Saudi Arabia’s decision to cut its official selling price (OSP) for flagship Arab Light to Asia in January for the first time in seven months raises concerns about the struggling demand for oil.
Amid the market turmoil, concerns over China’s economic health cast a shadow, potentially limiting fuel demand in the world’s second-largest oil consumer.
Moody’s recent decision to lower China’s A1 rating outlook from stable to negative further contributes to the apprehension.
Analysts will closely watch China’s preliminary trade data, including crude oil import figures, set to be released on Thursday.
The outcome will provide insights into the trajectory of China’s refinery runs, with expectations leaning towards a decline in November.
Russian President Vladimir Putin’s diplomatic visit to the United Arab Emirates and Saudi Arabia has added an extra layer of complexity to the oil market dynamics.
Discussions centered around the cooperation between Russia, the UAE, and OPEC+ in major oil and gas projects, highlighting the intricate geopolitical factors influencing oil prices.
U.S. Crude Production Hits Another Record, Posing Challenges for OPEC
U.S. crude oil production reached a new record in September, surging by 224,000 barrels per day to 13.24 million barrels per day.
The U.S. Energy Information Administration reported a consecutive monthly increase, adding 342,000 barrels per day over the previous three months, marking an annualized growth rate of 11%.
The surge in domestic production has led to a buildup of crude inventories and a softening of prices, challenging OPEC⁺ efforts to stabilize the market.
Despite a decrease in the number of active drilling rigs over the past year, U.S. production continues to rise.
This growth is attributed to enhanced drilling efficiency, with producers focusing on promising sites and drilling longer horizontal well sections to maximize contact with oil-bearing rock.
While OPEC⁺ production cuts have stabilized prices at relatively high levels, U.S. producers are benefiting from this stability.
The current strategy seems to embrace non-OPEC non-shale (NONS) producers, similar to how North Sea producers did in the 1980s.
Saudi Arabia, along with its OPEC⁺ partners, is resuming its role as a swing producer, balancing the market by adjusting its output.
Despite OPEC’s inability to formally collaborate with U.S. shale producers due to antitrust laws, efforts are made to include other NONS producers like Brazil in the coordination system.
This outreach aligns with the historical pattern of embracing rival producers to maintain control over a significant share of global production.
In contrast, U.S. gas production hit a seasonal record high in September, reaching 3,126 billion cubic feet.
However, unlike crude, there are signs that gas production growth is slowing due to very low prices and the absence of a swing producer.
Gas production increased by only 1.8% in September 2023 compared to the same month the previous year.
While the gas market is in the process of rebalancing, excess inventories may persist, keeping prices low.
The impact of a strengthening El Niño in the central and eastern Pacific Ocean could further influence temperatures and reduce nationwide heating demand, impacting gas prices in the coming months.
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