Economy

Petrol to Sell N340 per Litre in 2022 as Minister Promise Transport Subsidy

Published

2 years ago

November 24, 2021

The group Managing Director and Chief Executive Officer of Nigeria National Petroleum Company Limited, Malam Male Kyari, has said that after the much talked about fuel subsidy removal in 2022, the price of the product per litre may range between N320 to 340.

The MD said this during the 2021 edition of World Bank’s Nigeria Development Update.

Investors King had earlier reported the planned removal of subsidy as clarified by the Minister of Finance.

According to the Minister, the oil subsidy regime is budgeted to end in July. Effective from then, the federal government will no longer pay any subsidy on oil.

Zainab Ahmed, the Minister of Finance who was also at the update buttressed this and reveal the plan of the federal government to assist poor Nigerians to adapt to the transition.

She said that between 30 million to 40 million poor Nigeria will get N5000 per month as a transportation subsidy after the fuel subsidy is removed.

“Ahead of the target date of mid-2022 for the complete elimination of fuel subsidies, we are working with our partners on measures to cushion the potential negative impact of the removal of the subsidies on the most vulnerable at the bottom 40 per cent population. One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5000 to between 30-40 million deserving Nigerians,” she said.

If the federal is therefore going to give N5000 to 40 million people the total cost in a month will stand at 200 billion. Giving the same amount of grant to 30 million people will equally cost 150 billion in a month.

Both figures are higher than the amount Premium Times has speculated that the government spends on fuel subsidy in a month. According to a Premium Times report, 103.5 billion is the likely amount the Federal Government spends on oil subsidy in a month.

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Economy

Federal Government to Earn Over $500 Million in INTELS Deal

Published

6 hours ago

December 4, 2023

Investors King

The Nigerian Ports Authority (NPA) has unveiled an agreement with INTELS Nigeria Limited that is set to bring substantial financial gains to the federal government.

The comprehensive deal, negotiated over weeks, not only resolves a contentious pilotage contract but also promises to bolster Nigeria’s coffers by over $500 million.

The accord encompasses a multifaceted approach to financial benefits, including an interest waiver of $193,317,556 and a significant reduction in the interest rate on outstanding debt.

The debt, originally at a six-month London Interbank Offer Rate (LIBOR) + 6.5%, has been revised to a more favorable six months Secured Overnight Financing Rate (SOFR) + 3%.

Such financial restructuring is anticipated to save the government a staggering $326.8 million over the next 15 years.

NPA, in a detailed breakdown, elucidated that the agreement further involves spreading the debt repayment over 15 years, with the initial two years being interest-free.

Additionally, there is a commendable reduction in the commission percentage, dropping from 28% to 24.5%, a move that aligns with the government’s commitment to optimizing financial resources.

The Minister of Marine and Blue Economy, Adegboyega Oyetola, received accolades for his tireless efforts in steering the negotiations to a successful conclusion. NPA expressed gratitude for his commitment to putting Nigeria first, emphasizing the critical role played by the minister in resolving the long-standing INTELS dispute.

Former Vice President Atiku Abubakar, however, denied benefiting from the reinstatement of INTELS contracts.

He clarified that his divestment from the company remains unchanged, emphasizing that he cannot be a beneficiary of the restored pilotage monitoring business.

NPA’s move to ensure a resolution with INTELS is not only seen as a financial triumph but also as a strategic step towards fostering economic stability.

The agreement is poised to have a positive ripple effect on revenue generation and underscores the government’s commitment to diplomatic and economically viable solutions.

Economy

Nigeria’s Refinery Output Plummets by 92% in a Decade

Published

9 hours ago

December 4, 2023

Investors King

Nigeria’s local refineries recorded a 92% decline in output over the past decade, according to the Statistical Review of the World Energy 2023 report.

The data unveils a drastic drop in refining capacity, plummeting from 92,000 barrels per day (bpd) in 2012 to a mere 6,000 bpd in 2022.

This disconcerting revelation is echoed in the Organisation of the Petroleum Exporting Countries’ (OPEC) Annual Statistical Bulletin 2023, which underscores an 81% reduction in Nigeria’s crude oil refining capacity, falling from 33,000 bpd in 2018 to 6,000 bpd in 2022.

Despite owning four government-owned refineries, located in Port Harcourt, Warri, and Kaduna, with a collective capacity of around 4.45 million bpd, Nigeria continues to heavily rely on importing refined petroleum products.

This dependency raises questions about the nation’s resilience and self-sufficiency in the energy sector.

Minister of State for Petroleum, Heineken Lokpobiri, had previously announced plans for the Port Harcourt refinery to commence operations by the end of the current year, with the Warri and Kaduna refineries expected to follow suit in early 2024.

This revelation comes amid rising concerns over Nigeria’s continued reliance on importing refined petroleum products, even with substantial investments in refinery infrastructure.

The decline in local refining exacerbates the challenge, leading to soaring petrol prices and a strain on the nation’s economic landscape.

Industry experts stress the urgency of revitalizing local refineries, emphasizing that dependence on imports is neither sustainable nor conducive to the country’s economic well-being.

As Nigeria grapples with the complexities of its energy dynamics, the impending revival of local refineries stands out as a crucial solution to navigate these challenging times.

Economy

FIRS Grants Taxpayers Reprieve: Offers Waiver on Penalties and Interests for Overdue Taxes

Published

9 hours ago

December 4, 2023

Investors King

In a move to alleviate the challenges faced by taxpayers in meeting their obligations, the Federal Inland Revenue Service (FIRS) has announced a significant concession.

The Chairman, Zacch Adedeji, revealed that the agency would be granting a full waiver on penalties and interests for overdue taxes, emphasizing its commitment to supporting businesses amid economic challenges.

“In recognition of the challenges that many taxpayers have faced in settling their outstanding tax liabilities,” said Adedeji, “the Federal Inland Revenue Service has approved the following tax concessions for taxpayers with outstanding tax liabilities.”

This rare concession, in accordance with the Federal Inland Revenue Service (Establishment) Act, LFN 2004, as amended, entails a complete waiver of penalties and interests on outstanding tax liabilities.

Taxpayers are encouraged to take advantage of this opportunity, provided they fulfill the condition of settling the full outstanding principal before December 31, 2023.

Adedeji further cautioned that after the concession window closes, the full penalty and interest would be reinstated if the outstanding undisputed liability remains unpaid, reinforcing the urgency for taxpayers to act within the stipulated timeframe.