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Economy

NNPC Operating Deficit Hits N30.81bn in April

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NNPC

NNPC Operating Deficit Rises by Over 200% to N30.81bn in April

The Nigerian National petroleum Corporation (NNPC) said its operating deficit rose N30.81 billion in the month of April.

In the corporation’s latest financial and operational activities report for April, it says the over 200 percent loss was recorded through the Nigerian Petroleum Development Company, a subsidiary of the Nigerian National Petroleum Corporation.

It said, “The report in April 2020 indicates an increased trading deficit of N30.81bn compared to the N9.53bn deficit posted in March 2020.

“The current hike of over 200 per cent is attributed to the 29 per cent increased deficit for NPDC due to ongoing coronavirus-related impact of reduced exports, coupled with the upsurge in corporate headquarters deficit arising from terminal benefits made to retired staff.”

It added, “In addition, PPMC, NGMC and Duke Oil Incorporated posted reduced surpluses arising from the COVID-19 effect of reduced demand, fluctuating prices and marketers’ unwillingness to lift products thus affecting revenue.”

Meanwhile, the report also stated that the corporation supplied a total of 0.94 billion litres of petrol, representing about 31.37 million litres per day, in the month of April.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Reps Kick Against N4 Billion Bailout Proposed For Aviation, Says Grossly Inadequate

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The House of Representatives has kicked against the N4 billion bailout proposed by President Muhammadu Buhari led administration for the aviation industry following the damages done by COVID-19 to the sector.

The House Committee on Aviation on Monday said the sector needs around N50 billion to mitigate COVID-19 negative effect and described the N4 billion proposed as grossly inadequate.

Addressing journalists in Abuja, they said other nations have started providing bailouts to the aviation industry to cushion the effects of the pandemic and protect jobs.

The committee led by Nnolim Nnaji, explained that the just concluded public hearing on the amendment bills for the review of some aspects of the civil aviation Acts had brought to the fore ‘the impending crisis in the aviation industry which require urgent attention’.

Nnaji said, “As a parliament, we are going to look into these demands and, more especially, to find out why the Nigeria Customs Service would not respect the President’s Executive Order on duty exemption and other palliatives meant to lighten the burdens of the airlines.

“The multiple entries for foreign airlines is equally an important concern raised by the operators which must be looked into.

“The aviation sector requires huge capital for infrastructural development.

“The Federal Government’s N4bn bailout to the airlines and some palliatives to the agencies (not yet released) is too small. The airlines need at least N50bn bailout funds to cushion the coronavirus effect.

“We are requesting that other mechanisms should be introduced as a support to avert the collapse of the aviation sector.”

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Economy

Infrastructure: Nigeria is Behind Other Emerging Markets – Moody’s Investors Service

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Moody’s Investors Service, a global credit rating agency, has said Nigeria’s infrastructure is behind most emerging market peers and needs at least $3 trillion to bridge the over 30 years infrastructure gap.

The agency disclosed this on Sunday during its first report on Nigerian infrastructure.

According to the report, the low tax base along with weak institutions and governance frameworks are hindering investment in infrastructure.

It would be recalled that the International Monetary Fund (IMF) had blamed Nigeria’s rising debt servicing cost and weak revenue generation for the nation’s low infrastructure and other capital expenditure in the country.

The Fund, therefore, compelled Nigeria to up revenue generation through the increase of Valued Added Tax (VAT) and the introduction of cost-reflective electricity tariffs to support weak government revenue, especially at a time when oil revenue has dropped by about 50 percent.

In the report, Kunal Govindia, the Vice President and Senior Analyst at Moody’s Investors Service, was quoted as saying that Nigeria’s fast-rising population will compound the nation’s pressure if nothing is done to arrest infrastructure deficit on time.

He explained that the COVID-19 pandemic has compounded the already low government funding capacity and poor customer affordability.

Its low government funding capacity and customer affordability has been weakened further by the COVID-19 pandemic and low oil prices,” he said.

The report noted that “Financial guarantors, multilateral development banks and local institutional investors will be important in helping finance infrastructure development.

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Economy

Nigeria Begs Buyer to Pay $9 for Crude Oil in April -NNPC

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NNPC

The Nigerian National Petroleum Corporation (NNPC) said the nation begged global crude oil buyers to purchase Nigerian crude oil at $9 per barrel in April when COVID-19 plunged oil Prices.

The Group Managing Director, NNPC, Mallam Mele Kyari said on Friday while addressing energy correspondents in Abuja.

In April, Brent crude oil, against which Nigerian oil is priced, declined to a record low of $15.98 per barrel, the lowest since 1999 when Saudi Arabia and Russia engaged in a price war.

“Actually, we sold oil at $9 per barrel in April, and practically we begged people to come and take,” Kyari stated.

The Managing Director said the nation produced 2.49 million barrels per day in April, saying 3 million barrels per day is feasible.

He added that the year had been a very difficult year for the energy industry and the world economy as a whole. He said the sector fundamentals had changed.

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