- Railway Concession Issues Delay Petrol Distribution by Train
The Federal Government’s decision to concession the country’s rail system is delaying the plan to resume the distribution of petroleum products through the railway, the Petroleum Equalisation Fund announced on Tuesday.
PEF’s Executive Secretary, Ahmed Bobboi, said the resumption of petroleum products’ distribution by rail had been put on hold pending when issues surrounding the concession agreement of the country’s rail system were resolved.
He told journalists at a workshop in Abuja that moves by the agency to introduce railway petrol equalisation in Nigeria to enhance the distribution of petroleum products through the rail lines would not go on as planned until the government concluded its railway concession programme.
Bobboi said, “We planned to introduce railway equalisation last year, but certain developments delayed it and one of them was the planned concession of the railways by the government. At a point, General Electric showed interest and obviously, we want to wait and see who will manage the railway system between the government and the private sector.”
The PEF boss also stated that a new Information Technology system called sensor monitoring had been set up by the agency to monitor and determine the volume of petrol consumed in Nigeria daily.
He said the technology would also check the diversion of petrol, adding that such products were often diverted by dubious petroleum products marketers.
Bobboi further noted that to incentivise the adoption and use of Liquefied Petroleum Gas, popularly known as cooking gas, the agency had decided to introduce an equalisation scheme for the product.
He said, “We have introduced some few policies recently and these include the sensor monitoring project which is going on now. This is major in the sense that it does not just stop at serving the PEF but also agencies like the National Bureau of Statistics which require information we provide on petroleum products landing in this country and the refineries.
“This is key because up till today, it is difficult to determine how much we consume in this country in terms of PMS (Premium Motor Spirit). Different agencies give you different figures and I think it is not neat, but by introducing this sensor monitoring project, we believe it will serve the purpose of answering all these questions.”
Bobboi added, “Censor monitoring was approved by the Federal Executive Council in August 2018 and it is supposed to run for three years. Work has already started and before the end of this year, we will begin to see some of the landmarks.”
On the LPG and railway equalisation, he said, “Railway equalisation and LPG penetration: These are crucial to the existence of PEF because we think that by equalising gas in the country, we will help the government in its policy of trying to reduce desert encroachment. It is not only the government of Nigeria that is doing this but also the United Nations, which is promoting clean environment.”
Flour Mills of Nigeria Repays N51.64 Billion Series 2 Commercial Paper
Flour Mills of Nigeria Plc (FMN) has successfully repaid its N51.64 billion Series 2 Commercial Paper as revealed in a statement issued by the company.
This follows the earlier repayment of its N13.33 billion Series 1 Commercial Paper in August 2023.
Both the Series 1 and Series 2 Commercial Papers, totaling N64.97 billion, were initially issued on February 22, 2023, under FMN’s N200 billion Commercial Paper Programme.
The Series 1, with a yield of 13.0%, raised N13.3 billion, while the Series 2, with a yield of 14.0%, raised N51.64 billion.
FMN had launched its N200 billion Commercial Paper Programme on February 10, 2023, reflecting the company’s strategic financial planning.
The Group Chief Finance Officer, Mr. Anders Kristiansson, expressed satisfaction with the timely and successful repayment of the Series 2 Commercial Paper.
He emphasized FMN’s commitment to financial prudence and acknowledged the confidence placed in the organization by the investing public.
Kristiansson expressed gratitude to stakeholders for their continuous support, reiterating FMN’s dedication to delivering sustainable value and upholding the highest standards of corporate governance.
In addition to the successful repayment, FMN tapped into the market for its Series 3 Commercial Paper in June 2023, with subscriptions from banks and Pension Fund Administrators, contributing 39.7% and 40.8%, respectively.
The transaction was managed by FBNQuest Merchant Bank Limited as the Lead Arranger, with ChapelHill Denham Advisory Limited, FCMB Capital Limited, and United Capital PLC serving as Joint Arrangers.
African Airlines Projected to Cut Losses to $400m in 2024, Says IATA
The International Air Transport Association (IATA) has forecasted a reduction in losses for Nigerian and other African airlines from $500 million in 2023 to $400 million in 2024.
The Switzerland-based IATA made this projection while presenting the global airline industry outlook in Geneva, Switzerland, on Wednesday.
IATA’s Director-General, Willie Walsh, shared the outlook, stating that global airlines are expected to generate approximately $964 billion in revenue in the coming year.
The report indicated that airline industry net profits are anticipated to reach $25.7 billion in 2024, reflecting a slight improvement over the projected $23.3 billion net profit for 2023.
Despite the challenges faced by the aviation industry in recent years, IATA sees the $25.7 billion net profit in 2024 as a testament to aviation’s resilience.
Walsh acknowledged the impressive speed of recovery but emphasized that the net profit margin of 2.7% remains below industry expectations.
IATA estimates that around 4.7 billion people will travel in 2024, surpassing the pre-pandemic level of 4.5 billion recorded in 2019.
However, Walsh highlighted ongoing challenges, including regulatory burdens, fragmentation, high infrastructure costs, and a supply chain populated with uncertainties.
He emphasized the need for the industry to build a resilient future, given its significant contribution to global GDP and livelihoods.
Fuel prices are expected to average $113.8 per barrel in 2024, accounting for 31% of all operating costs, totaling $281 billion.
Walsh concluded by expressing optimism about more normal growth patterns for both passenger and cargo in the post-pandemic era.
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