- NNPC Restores Normal Supply of Petrol at Cost of N1.4tn
Exactly six months after the Nigerian National Petroleum Corporation (NNPC) assumed the sole importer of petrol in October 2017 and struggled to meet the country’s need, the corporation has finally normalised the supply of the product, with depot owners now selling at official ex-depot price, investigation has revealed.
The corporation’s inability to bridge the supply gap created by the refusal of the private marketers to import petrol, had led to fuel crisis, which marred the Christmas celebration and lingered into the first quarter of 2018.
However, NNPC’s success was achieved at a great cost to the country as the Minister of State for Petroleum, Dr. Ibe Kachikwu had revealed that the corporation’s under-recovery, which is the loss incurred by selling the imported product at official prices of N133 per litre at the depots and N145 at the pumps, had hit N1.4 trillion yearly.
Despite the low pump price of N65 paid by Nigerians, there was allegation of massive corruption in the subsidy regime when subsidy claims rose to N1.1 trillion, against the N286 billion budgeted in 2011 by the federal government.
But the recent revelation by the petroleum minister is an indication that at a pump price of N145, the NNPC incurs a loss of N1.4 trillion yearly to subsidise petrol and ensure that Nigerians get the product at the official N145 pump price.
Investigation at the weekend revealed that with the NNPC’s efforts, which have ensured that the country is flooded with petrol, some of the depot owners were selling at N133 per litre, against N160, they were selling the product early this year.
Some marketers, who received the allocation from the NNPC were, however, still selling slightly above the official ex-depot price.
Investigation also gathered that the slight increase was not significant to fuel a hike in the N145 pump price.
For instance, 15 depot owners and six major marketers had stock of petrol at the weekend.
The 15 depots include, AA Rano, Aiteo, Bound Oil, Bovas, Chi-Pet, D-Jones, First Royal, Folawiyo, Gulf Treasure, Integrated Oil, MRS, Obat, Africa Tanker, Wosbas and NIPCO Plc.
It was learnt that the major marketers dispense the product to only their dealers at N145 and pay them extra margins to enable the dealers sell at the same N145 at the filling stations.
But some of the 15 depot owners sell at between N134 per litre and N136.50 per litre, against the N123.28 – N133.28 ex-depot price band recommended by the Petroleum Products Pricing Regulatory Authority (PPPRA) on May 11, 2016 when this current pricing regime took effect.
The NNPC had on March 5, 2018 announced that it was spending N774 million daily as subsidy on the 50 million litres of PMS consumed across the country.
The corporation had attributed the huge under-recover to the proliferation of filling stations in communities with international land and coastal borders across the country.
The Group Managing Director of NNPC, Dr. Maikanti Baru had explained that the multiplication of filling stations had energised unprecedented cross-border smuggling of petrol to neighbouring countries, making it difficult to sanitise the fuel supply and distribution matrix in Nigeria.
Kachikwu at the weekend restated that the NNPC was spending enormous resources to subsidise petrol.
The Highest Corporation Taxes Around the World and the Main Drivers Behind them
Taxes Pay by Corporation Around the World and the Main Drivers Behind them
While corporation tax rates are influenced by the country’s definition, there’s clearly a pattern with developing countries and emerging economies paying higher rates to sustain the country.
The top five richest countries in the world’s corporation tax are relatively varied, with Luxemburg standing at 27.08%, Norway at 22%, Iceland at 20%, Switzerland at 18% and Ireland at 12.5%. It would appear that some countries’ cultures factor into how much tax they pay. For example, Scandinavian countries are proud to pay higher taxes to contribute to social welfare.
On average, Africa has the highest corporation tax rate throughout the world’s continents at 28.45% and South America, the second highest with an average rate of 27.63%. However, Europe stands at the lowest rate of 20.27%. Does this contradict the claim that developed countries pay higher tax?
OECD explained that corporation tax plays a key part in government revenue. This is particularly true in developing countries, despite the global trend of falling rates since the 1980s. Let’s take a closer look at two continents, South America and Africa, paying the highest corporation tax rates in the world.
South America has most countries in highest corporation tax top 10
According to data analysed, Brazil and Venezuela have the highest corporation tax at 34%, followed closely by Colombia at 33%, and Argentina at 30%, making South America the continent with the most countries in the top 10 who pay the highest corporation tax.
It is unclear whether South America, as an emerging continent, is charging higher taxes in order to raise government revenue or to benefit from businesses that are looking to expand internationally and enter new markets. According to research, South America is becoming a popular choice for business to enter, with strong trade links and an advantageous geographic location. Indeed, South America is a large continent where some countries are business friendly and others are harder to penetrate.
Africa: the continent with the highest average corporation tax
Being the poorest continent in the world, Africa unsurprisingly has the highest average corporation tax at 28.45%. With the highest in this data being Zambia at 35% and the lowest being Libya and Madagascar at 20%, South Africa stands roughly in the middle at 28%, slightly above average for Africa overall. Does this mean that South Africa is the safest bet for business?
South Africa is one of Africa’s largest economies, with 54 diverse countries in terms of political stability, development, growth, and population. As South Africa has been a relatively slow growth area over the years, corporation tax dropped from 34.55% in 2012 to the current rate — but was this effective? GDP in South Africa has fluctuated quite dramatically since the 1960s. Business favours countries with political stability, which is something South Africa doesn’t currently have. Furthermore, South Africa’s government debt to GDP sits roughly in the middle of the continent’s countries — is this influencing their corporate tax rate?
|Puerto Rico||North America||37.5|
|Sri Lanka||Asia Pacific||28|
|New Zealand||Asia Pacific||28|
|South Korea||Asia Pacific||25|
|United States||North America||21|
|Saudi Arabia||Middle East||20|
|Hong Kong||Asia Pacific||16.5|
Lucy Desai is a content writer at QuickBooks, a global company offering the world’s leading accountancy software.
Nigeria’s Crude Oil Production Declined to 1.31mbpd in September
Nigeria’s Crude Oil Output Declined from 1.37mbpd in August to 1.31mbpd in September
The Organisation of the Petroleum Exporting Countries (OPEC) reported that Nigeria’s crude oil production declined by 58,000 barrels per day in the Month of September when compared to the nation’s oil production of August.
In its latest oil market report, the cartel said Nigeria produced 1.37 million barrels per day in the month of August but that number declined by 58,000 to 1.31 million barrels per day in September. Bringing the total decline for the 30 days of september to 1.74 million barrels.
On oil price movement in September, the organisation said prices settled lower in the month under review after four consecutive months of gains.
OPEC Reference Basket declined by 8.1 percent or $3.65 in September to $41.54 per barrel, while it moderated to $40.62 per barrel from the year-to-date.
Commenting on the recent changed in Nigeria’s monetary policy rate, the oil cartel said “the recent cut is a part of the policy to continue supporting the economy that plunged 6.1 per cent in the second quarter hit by the global pandemic.
“Nevertheless, Nigeria’s annual inflation rate surged to the highest rate since March 2018 in August 2020, as it rose to 13.22 per cent year-on-year from 12.82 per in in July.”
Oil prices sustained bullish trend on Thursday after data showed U.S oil inventories declined last week.
Global Economy to Lose $28 Trillion in Five Years -IMF
International Monetary Fund Says Global Economy May Lose $28 Trillion in the Next Five Years to COVID-19
The International Monetary Fund (IMF) has said the world’s economy may lose as much as $28 trillion to COVID-19 in the next five years.
The Fund’s Managing Director, Kristalina Georgieva, disclosed this during her opening remarks at the annual general meeting conference held on Wednesday.
She said “The picture over the last few months has become less dire, yet we continue to project the worst global recession since the great depression.
“Growth is expected to fall to -4.4 per cent this year. And over the next five years, the crisis could cost an estimated $28tn in output losses.
“At the same time, we can see stars shining above us. We see unprecedented efforts in vaccine development and treatment.
“We see extraordinary and coordinated fiscal and monetary measures putting a floor under the world economy. And the world is starting to learn how to live with the virus.
“While there is tremendous uncertainty around our forecast, we project a partial and uneven recovery in 2021, with growth expected at 5.2 per cent.”
“As I said in my curtain raiser speech, all countries now face a “long ascent”—a journey that will be difficult, uneven, uncertain, and prone to setbacks.
“Think of how the virus is resurging in a number of countries.”
She also made recommendations, the managing director explained that an unusual crisis requires an unusual approach and solution.
Georgieva said, “In our Global Policy Agenda, which we are releasing today, we outline the measures we believe are needed to overcome the crisis and build a brighter future. Let me highlight three priorities:
“First—continue with essential measures to protect lives and livelihoods.
“A durable economic recovery is only possible if we beat the pandemic everywhere. Stepping up vital health measures is imperative.
“As is fiscal and monetary support to households and firms. These lifelines—such as credit guarantees and wage subsidies—are likely to remain critical for some time, to ensure economic and financial stability.
“Pull the plug too early, and you risk serious, self-inflicted harm.”
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