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NNPC Grows Trading Surplus to N39.9 Billion in One Month

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Mele Kyari - Investors King

The Nigerian National Petroleum Corporation (NNPC) has disclosed that its trading surplus for the month of February 2021 increased to N39.85 billion.

This is an increase of 314.24 percent when compared to N9.62 billion surplus recorded in the preceding month under review.

Trading surplus or trading deficit is derived after deduction of the expenditure profile from the revenue for the period under review.

According to the Corporation’s February 2021 Monthly Financial and Operations Report (MFOR), NNPC Group operating revenue as compared to January 2021, increased by 35.64% or N 152.07billion to stand at N578.79billion.

Similarly, expenditure for the month increased by 29.21% or N121.83billion to stand at N538.94billion. The expenditure for the month as a proportion of revenue was 0.93% as against 0.98% the previous month.

The report noted that the significant increase in trading surplus is attributed mainly to reconciled accounts by the Corporation’s downstream subsidiary, the Petroleum Products Marketing Company (PPMC), using the Petroleum Products Pricing Regulatory Agency (PPPRA) pricing template.

Other factors that boosted the trading surplus figure, according to the Corporation, included the performance of Duke Oil, Nigerian Gas Company (NGC) and Nigerian Gas Marketing Company (NGMC) which recorded robust gains as a result of increased debt collection and cost optimization measures.

Conversely, during the period under review, 54 pipeline points were vandalized representing 50% increase from the 27 points recorded in January 2021.

The report noted that Warri Area accounted for 50% and Mosimi Area accounted for 39% of the vandalized points while Kaduna and Port Harcourt Areas accounted for 7% and 4% respectively.

NNPC continues to work in collaboration with the local communities and other stakeholders to eliminate the menace of pipeline vandalism.

In the period under review, the Corporation supplied a total of 1.41bn litres of Premium Motor Spirit (petrol) translating to 50.52m litres/day.

In terms of natural gas off take, commercialization and utilization, out of the 206.05Billion Cubic Feet (BCF) produced in February 2021, a total of 133.06BCF was commercialized consisting of 40.15 BCF and 92.91 BCF for the domestic and export market respectively.

This translates to a total supply of 1,433.75Million Standard Cubic Feet Per Day (mmscfd) of gas to the domestic market and 3,318.25mmscfd of gas supplied to the export market for the month.

This implies that 64.48% of the average daily gas produced was commercialized while the balance of 35.52% was re-injected, used as upstream fuel gas or flared.

Gas flare rate was 7.67% for the month under review (i.e. 565.52mmscfd) compared with average gas flare rate of 7.12% (i.e. 529.20mmscfd) for the period of February 2020 to February 2021.

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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Oil

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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