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FG’s $406.7m Debt Recovery Suit Against Shell Adjourned

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Shell profit drops 44 percent
  • FG’s $406.7m Debt Recovery Suit Against Shell Adjourned

A Federal High Court in Lagos has adjourned until June 19 hearing in a debt recovery suit filed by the Federal Government against Shell Western Supply and Trading Ltd over an alleged $406.7m shortfall in crude oil shipment.

The suit numbered FHC/L/CS/336/16, was filed by Fabian Ajogwu, the counsel to the Federal Government.

It has as defendants, Shell Petroleum Development Company of Nigeria Ltd and Shell Western Supply and Trading Ltd, its subsidiary.

The money was said to be for crude oil lifted in 2013 and 2014.

The suit is pending before Justice Mojisola Olatoregun.

The case was adjourned until June 19, due to the Eid-Il-Fitr celebrations, and the new date has already been communicated to the respective parties.

In the suit, the plaintiff is claiming the sum of $406.7m from the defendants, representing the shortfall of money it paid into the Federal Government account with the Central Bank of Nigeria.

In a supporting affidavit, the Federal Government had accused the Anglo-Dutch company of not declaring or under-declaring crude oil shipments during the period.

It said that this was following forensic analysis of bills of lading and shipping documents alleging that Shell cheated Nigeria of a deserving revenue.

According to the affidavit, the consortium of experts tracked the global movements of the country’s hydro-carbons, including crude oil and gas.

The plaintiff said that it identified the companies engaged in the practices that led to missing revenues from crude oil and gas export sales to different parts of the world.

The plaintiff revealed discrepancies in the export records from Nigeria with the import records at US ports, and averred that the undeclared shipments between January 2013 and December 2014 brought the total value of the entire shortfall to $406.75m.

The defendants were alleged to have failed to respond to a Federal Government letter through its legal representative, seeking clarification as to the discrepancies.

The Federal Government is, therefore, seeking a court order to compel the two companies to pay $406.7m, being the total value of the missing revenue and interest payment at 21 per cent per annum.

In addition, the government is also asking Shell to pay general exemplary damages in the sum of $406.7m as well as the cost of the legal action.

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 long experience in the global financial market.

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Economy

FG Marches Forward With Zero Subsidy Plan

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FG Says Its Done With Fuel Subsidy After Years of Wasted Resources

The Federal Government through the Ministry of Petroleum Resources said there is no going back on zero-subsidy.

According to a statement released on Thursday by the Minister of State for Petroleum Resources, Timipre Sylva, the Federal Government can no longer bear the burden of petrol subsidy.

In the statement titled ‘Deregulation: The facts and the reasons behind the policy’, the minister said “After a thorough examination of the economics of subsidising PMS for domestic consumption, the Federal Government concluded that it was unrealistic to continue with the burden of subsidising PMS to the tune of trillions of naira every year, more so when this subsidy was benefiting in large part the rich, rather than the poor and ordinary Nigerians,” he said.

Sylva explained that it simply means that the government will not be the sole supplier of petroleum products but will now encourage the private sector to get involved in the business.

“This means also that market forces will henceforth determine the prices at the pump. In line with global best practices, the government will continue to play its traditional role of regulation to ensure that this strategic commodity is not priced arbitrarily by private sector suppliers,” Sylva said.

The minister likened the regulatory function to the role of the Central Bank in the banking sector, “ensuring that commercial banks do not charge arbitrary interest rates”.

Sylva said, “Petroleum products are refined from crude oil. Therefore, the price of crude (the feedstock) for the refining process will affect the price of the refined product.

“When crude oil prices were down, government, through its regulatory functions, ensured that the benefits of lower crude oil prices were enjoyed by Nigerians by ensuring that PMS was lowered. At that time, we indicated that an increase in crude oil prices will also reflect at the pump.”

He said one of the reasons Nigeria has not been able to attract enough investment into the refining industry was because of the burden of fuel subsidy.

Sylva said, “We need to free up that investment space so that what happened in the banking sector, aviation sector and other sectors can happen in the midstream and downstream oil sector.

“We can no longer avoid the inevitable and expect the impossible to continue. There was no time government promised to reduce pump price and keep it permanently low.”

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President Buhari to Sign 2020 Revised Budget Today

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Muhammadu Buhari

Buhari to Sign 2020 Revised Budget Into Law on Friday

President Muhammadu Buhari will sign the 2020 revised budget on Friday, according to the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed.

Ahmed disclosed this on Thursday after a meeting with the leaders of the National Assembly on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper.

Ahmed said, “In keeping strictly with the January–December budget cycle, the President will tomorrow (Friday) sign into law, the revised N10.8tn budget for the year 2020, which was passed by the National Assembly in June.

“This for us is a journey towards ensuring that the progress that we have made as a collective to return the fiscal year to January – December is maintained for the 2021 budget as well.

“The President has directed that we must deliver the budget to the National Assembly by the end of September.”

Ahmed further stated that between the months of January and May 2020, the Federal Government generated N1.48 trillion in revenue, 56 percent of its initial target.

She added that out of all the total amount generated as revenue during the period, oil revenues were N701.6 billion while the non-oil tax revenues accounted for N439.32 billion.

Companies Income Tax and Value Added Tax contributed N213.24 billion and N68.09 billion, respectively. The Customs realised N158 billion during the period under review.

She said, “Other revenues amounted to N339.51bn, of which independent revenues was N80.22bn.

“Recoveries and stamp duty collected during the period are yet to be booked in the fiscal accounts.”

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Africa’s Economy to Contract by $236bn in Value in 2020 Says AfDB

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African GDP to Contract by $236bn in Value Says AfDB

The African Development Bank (AfDB) has said the ravaging COVID-19 pandemic could cost the entire African continent about $236.7 billion in cumulative Gross Domestic Product.

The bank disclosed this in its latest report on African Economic Outlook (Supplement) released on Tuesday.

The bank predicted that the damage could be far greater if the impacts of the pandemic persist on the continent beyond the second quarter of the year. It said this could lead to a bigger contraction in Africa’s GDP in 2020.

According to the bank, the continent’s Real GDP could contract by as much as 1.7 percent this year if the virus has a shorter duration. This represents about a 5.6 percent decline from the January 2020 prediction.

However, under a long term scenario into the second half of the year, this could result in a deeper contraction in GDP.

This, the bank said could lead to 3.4 contraction, up from the 1.7 percent projected under the shorter duration and represents a decline of 7.3 percent from the previous projection before the outbreak.

It, therefore, said the combined loss due to the COVID-19 pandemic in Africa could range between $173.1 billion and $234.7 billion in 2020-2021.

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