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NNPC Insists on December Deadline to End Petrol Import

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  • NNPC Insists on December Deadline to End Petrol Import

The Nigerian National Petroleum Corporation (NNPC) has indicated it will meet up with the December 2019 deadline proposed by the federal government to end the importation of refined petrol into Nigeria.

The development is expected to pave way for the refineries in Port Harcourt, Warri and Kaduna, to produce most of the petrol consumed in the domestic economy.

In 2018, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had disclosed Nigeria would exit importation of petrol and totally depend on its own refined petrol.

The minister had then stated that a steering committee headed by him and others had been constituted to fine-tune the process.

But in a September 2018 operations and financial report of the NNPC obtained recently in Abuja, the corporation explained it would abide by the deadline, and was making progress on the plan.

“NNPC is intensifying efforts towards the rehabilitation of the refineries to meet December, 2019 target of ending fuel importation,” the report stated about plan to meet the target.

Nigeria’s expenditure on petrol importation has continued to grow with the Group Managing Director of NNPC, Dr. Maikanti Baru, recently disclosing that the total amount of under-recovery – a term now used by the corporation to describe the financial amount of subsidy the federal government absorbs for keeping the pump price of petrol at N145 per litre, was N25 per litre.

This figure when calculated against the three billion litres of petrol the corporation recently imported suggested Nigeria may have recorded about N75 billion under-recovery in this regards.

Furthermore, if calculated on the basis of 60 days which the NNPC said the three billion litres would last Nigeria, and which amounted to 50 million litres consumption per day, then the corporation may be recording an under-recovery of N1.250 billion daily to keep petrol pump price at government regulated price of N145 per litre.

Meanwhile, the NNPC report also indicated that within the period under consideration, up to 628,000 barrels of oil was lost to shutdown of pipeline and export terminals.

It explained: “The Trans Escravos Pipeline (TEP) was shut down for seven days from 3rd to 10th August 2018 due to observed leaks at the Otumara axis with production loss of 30,000 barrels per day (bpd).

“Also the Otumara flow station was shut down for 10 days from 18th – 27th August 2018 for maintenance works with production shut-in of 34,000bpd.

“The TRP (Brass Creek / Trans Ramos Pipeline) was shut down since 24th April 2018 due to leaks in a creek crossing in the Odimodi area with the loss of approximately 35,000bpd of production into Forcados Terminal. The line remains shut all through the month of August and to date.”

It further stated: “OYO Terminal: Due (to) technical issues with the only producing well, this terminal was shut down in the whole of August from 16th August 2018 and to date. The production shut-in was 5,000bpd.

“The Agbami, Brass and Qua Iboe terminals were all shut down for one day each in August 2018 for maintenance, plant trip and power issues respectively leading to production cut of 23,000bpd, 10,000bpd and 45,000bpd respectively.”

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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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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