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Economy

Senate Passes Harmonised PIGB, Seeks Buhari’s Assent

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$29.9bn Loan
  • Senate Passes Harmonised PIGB, Seeks Buhari’s Assent

At the plenary on Wednesday, the Senate passed the harmonised version of the Petroleum Industry Governance Bill.

The passage followed the adoption of the report by the Conference Committee on the PIGB, which harmonised the versions earlier passed by the Senate and House of Representatives.

The harmonised version of the bill seeks to unbundle the Nigerian National Petroleum Corporation and merge its subsidiaries such as the Department of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency into one entity.

A copy of the passed bill was obtained by our correspondent on Wednesday.

The proposed law seeks to establish the Petroleum Equalisation Fund “into which shall be paid all monies payable to the Equalisation Fund,” including a five per cent fuel levy “in respect of all fuel sold and distributed within the federation, which shall be charged subject to the approval of the minister (of Petroleum Resources).”

The bill, however, did not state who would pay the levy among the Federal Government, importers and marketers, and consumers. It also did not state the level at which the levy would be paid, whether during exploration, importation or at the retail pump level.

It was not stated if the levy would be charged per barrel of oil or per litre of fuel.

The proposed PEF will also generate revenue from “all subventions, fees and charges for services rendered or publications made by the fund; all other funding which may, from time to time, accrue to the fund; any net surplus revenue recovered from petroleum products marketing companies pursuant to this Act; and such sums as may be provided for the purpose of the Equalisation Fund by the Federal Government.”

The Equalisation Fund, according to the bill, will use the funds received for reimbursement of oil marketing companies for any loss sustained by them “solely and exclusively as a result of the sale by them of petroleum products at uniform prices throughout Nigeria as may be fixed by the minister.”

The fund will be responsible for “the provision of financial and other support as may from time to time be determined by the minister.”

The financial year of the fund will be 12 calendar months, commencing on the first day of January of each year.

Some of the functions of the fund include collecting all revenues and levies charged and “determining, at such intervals as the board may direct, the net surplus revenue recoverable from any oil marketing company and accruing to that company from the sale by it of petroleum products at such uniform prices as may be fixed by the minister.”

It will also be “determining the amount of reimbursement due to any oil marketing company for purposes of equalisation of price of products; the payment of all disbursements authorised; and accounting for all monies collected, paid or otherwise expended.”

The proposed law also seeks to establish the Nigeria Petroleum Regulatory Commission, to be vested with “all assets, funds, resources and other movable and immovable properties, which immediately before the effective date were held by the Petroleum Inspectorate, the Department of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency.”

The bill added, “As from the date of commencement of this Act, the rights, interests, obligations and liabilities of the PI, DPR and the PPPRA existing immediately before the effective date under any contract or instrument or law or in equity shall by virtue of this Act be assigned to and vested in the commission.”

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. Contact Samed on Twitter: @sameolukoya

Economy

Citigroup Sees $60 Per Barrel Crude Oil in the Next 12 Months

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Crude oil

Citigroup Says Crude Oil Will Reach $60 Per Barrel in a year

Despite the current economic downturn and the projected second phase of COVID-19, Citigroup, a New-York based financial service company, has said oil price could hit $60 per barrel in the next 12 months.

Citigroup disclosed this on Thursday during a virtual EMEA Media Summit titled – ‘Navigating the Future: What’s Next in a Post-COVID-19 World’.

“After a substantial underperformance in the last six months relative to several other commodities, crude will eventually bounce back to around $60 per barrel over the next 12 months,” Max Layton, European Head of Commodities Strategy, Citigroup said while giving a presentation on the outlook for commodities in the second half of 2020, and into 2021.

This means Brent crude oil would rise by at least 50 percent from the current level of $42 per barrel in the next 12 months.

“It’s going to be a function of the demand and supply but recently we have been seeing a spike in the demand for some of the commodities,” said Atiq Rehman, Head of EMEA Emerging Markets, Citigroup.

“A lot of these economies are heavily commodity-dependent, and perhaps, in the past have been guilty of not diversifying when they come under pressure. I think perhaps, this recent moves will push them to diversify away from simply commodities,” Grant Carson, Head of TRUK And Non-Presence Countries, Citigroup, stated citing Russian as one of the countries that have recorded success in diversifying away from crude oil.

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Economy

Oil Sustains $42 Price Level as OPEC Output Drops to Over Two-Decade Low

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Oil price

OPEC Oil Output Drops to Over Two-Decade Low in June

Crude oil sustained $42 per barrel price level following a recent survey conducted by Reuters that showed the Organisation for the Petroleum Exporting Countries (OPEC) managed to cut oil production to over two-decade low in the month of June.

According to the survey, OPEC’s 13 members pumped 22.62 million barrels per day in June, 1.92 million barrels per day below May’s revised figure. The lowest since May 1991.

OPEC and allies, together referred to as OPEC plus, had agreed to cut oil production by 9.7 million barrels per day in the month of April to rebalance the global oil market and prop up prices amid COVID-19 pandemic.

OPEC’s share of the 9.7 million barrels per day production cut was 6.084 million bpd but OPEC delivered 6.523 million bpd cut in the month of June despite the inconsistencies from Nigeria, Angola and Iraq.

In June, Saudi Arabia reduced production by 1.13 million barrels per day to 7.53 million bpd. While Kuwait and the United Arab Emirates met their quota but struggle to fulfill the extra cuts.

Nigeria, Iraq and Angola continue to struggle in the month of June. However, their performance improved compared to May as Nigeria attained 77 percent compliance level, up from 19 percent in May.

While Iraq and Angola achieved 70 percent and 80 percent compliance level, respectively. Nigeria and Iraq have pledged to cut more in July despite their economic challenges. Angola, however, said it would not be able to cut extra oil production until October.

Brent crude oil, against which Nigerian oil is measured, rose to $42.48 per barrel on Friday as at 2:58 pm Nigerian time.

UKOilDaily

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Economy

Nigeria Labour Congress Says No Fuel Increase Amid COVID-19 Pandemic

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No Fuel Increase During COVID-19 Pandemic, Says Nigeria Labour Congress

The Nigeria Labour Congress (NLC) on Thursday rejected the new fuel price announced by the Petroleum Products Price Regulatory Agency (PPPRA) on Wednesday.

In a statement issued by Ayuba Wabba, the President, NLC, the labour demanded instant reversal to the old price, saying the move will kill businesses and worsen the nation’s poverty level at a time when nations are looking to ease economic burden of their citizens and mitigate negative impacts of COVID-19.

The PPPRA had raised the value band of Premium Motor Spirit, commonly referred to as Petrol, to between N140.80 and N143.80 per litre on Wednesday because of the recent increase in crude oil prices.

Nigeria Labour Congress argued that “PPPRA contradicted itself when it said that the latest price increase described as an “advisory” was meant to regulate a product that government claims had been de-regulated.

“That this new hike in the pump price of petrol was announced without the approval of the board of the PPPRA and the oversight ministry speaks volume of the arbitrariness and public contempt in the operations of PPPRA. We find this deeply disturbing.

“It is also very embarrassing that the PPPRA boss, while trying to defend the indefensible, appeared to be out of sorts and ready to clutch at any available straws to sell his ice block merchandise to Eskimos.

“Apart from contradicting himself that PPPRA is still trying to regulate a deregulated product through ‘advisories’, the PPPRA went on to exert more nails on the coffin of his polemics when he argued that PPPRA was just like the Central Bank of Nigeria, CBN, and the National Insurance Commission, NAICOM, that would always act to protect the public interest.

“That was how far the niceties went. The rest of the statement by the PPPRA boss was about how PPPRA plans to protect investors and increase their profit.”

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