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FG Proposes Two Fuel Pump Prices
Federal Government is mulling a plural fuel pricing regime, under the arrangement of the Nigeria National Petroleum Corporation (NNPC), that they would sell at N145 while independent marketers would import and dispense at their own rate, making it two different fuel price.
Dr. Ibe Kachikwu, minister of State for Petroleum Resources who made the revelation when he appeared before the Senate Committee on Petroleum Downstream also revealed that the current scarcity might linger till June 2019, when government-owned and private refineries would fully come on stream.
Other recommendations Kachikwu proffered as possible solution to the fuel crisis, which peaked during the Yuletide included a special foreign exchange price modulation as well as special tax consideration for independent oil marketers to reduce their financial burden.
He said if any of the three recommendations was adopted, fuel scarcity would be temporarily handled until refineries come on stream.
In addition, Kachikwu also called for a better border policing, arguing that since it was more lucrative to sell PMS in neighbouring countries, marketers will likely divert their products to those places.
“What this country needs is to ensure that the refineries work. It is shameful that after more than 50 years, we still do not have working refineries. Selling crude is like selling raw agricultural materials. Once the private refineries start working, this scarcity issue will be behind us. Before we get there, we have 18 months to manage this problem.”
Kachikwu who was accompanied by Mr. Maikanti Baru, group managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), and other officials of his ministry, on behalf of President Muhammadu Buhari, apologised to Nigerians for the difficulties they went through over the fuel scarcity during the festive seasons.
“Our sympathies go the Nigerian people. I will not say much,” he stated.
While still testifying before the senate committee which cut short its recess to investigate the fuel crisis, Kachikwu added: “All I can say is that there are lots of issues. The major players stopped importation because of the price difference in landing cost. Once that happened, NNPC started providing 100 per cent products to the local market.
“There are issues on ground. Some are due to non-payment. Whenever situations like this arise, other issues arise. People moved products to other countries and decided to hide the products. We had to move in and release these products.
“What this says, for me, is that the business model of oil is not where it should be. If the prices of refined products escalate internationally, we do not react when we should. When it increases internationally, it has its own effects here. Between now and 2019 when our refineries will start working, we will have to rely on importation,” he added.
Speaking on the three recommendations, he said: “During the 18 months emergency period, we need to look at pricing. We need to find a way to get marketers back to importation. Landing cost is about N170-175. We sell at N145. We need to address this problem. There are series of items. But the key item is the international selling price for sale of refined product.
“There is a gap. How do we deal with the gap? Whatever we do, we need to free the marketers to do their business.
Exchange rate was N145 when price was tagged in 2015. One model is for the CBN to create a special exchange rate for independent oil marketers to import their products. This will help.
“Is there a way to grant tax holiday for them? Government can look into the taxing system. If they do that, marketers will have more funds to import products. Potential of having a plural pricing system? That is, NNPC outlets can sell at N145, while independent marketers can import at their rate and sell at their own rate. Until we deal with this issue, we will not get out of the problem.
“We have not been able to deal with the issue of border policing. It is still more lucrative to sell this product outside the country. I am proposing that trackers be placed on trucks leaving the depots. That is one way to deal with this issue.”
News
NELFUND Says UTME, NIN, BVN Mandatory for Student Loans
Nigerian Education Loan Fund (NELFUND) has said that Nigerian students will need to present their Unified Tertiary Matriculation Examination registration number (UTME); National Identification Number (NIN); and Bank Verification Number (BVN) to access student loans.
Mr Akintunde Sawyerr, managing director of NELFUND, assured that the body would ensure that those he called ‘ghost students’ would not have access to the soon-to-be-launched scheme.
The MD noted that NELFUND has put processes in place to ensure that all applicants and beneficiaries are traceable to prevent the loan from turning into a sort of national cake.
“We are using technology to run the system. The process of application is online and we are limiting human contact as much as possible. Once you have a Bank Verification Number, BVN and National Identification Number, NIN, which are parts of the requirements, we will have access to your data and all your accounts. This will also help us to know if you are qualified or not,” he explained.
He explained further that those who are already in school can apply for the loan at any level of their study, but must be at the beginning of each session. They would also have to provide their admission and matriculation details in addition to BVN and NIN.
According to the NELFUND boss, about 1.2 million Nigerian students in tertiary institutions and government-recognized skill acquisition centres would be among the first batch of beneficiaries. The number may increase as time goes on.
The programme, he noted, will be funded with one per cent of the total annual collectable revenue by the Federal Inland Revenue Service (FIRS), which will amount to N194 billion if the agency meets its projection.
He explained that the loan would be paid in two segments. The first, he said, is the chargeable school fees which would be paid directly to the institutions while stipend would be paid into individual student’s account for day-to-day upkeep.
Mr. Sawyerr stated that the amount individual applicants will access will vary because of the course of study, school fees payable and geographical location of the institutions among others.
On the method of payback, he said, “You don’t start paying back the loan until two years after your National Youth Service Corps, NYSC Scheme and that is, if you have secured a job or business. A beneficiary can defer repayment if he has not secured a job, but if after due diligence, he defaulted, then he becomes a criminal and we will work with every agency that can help us get the money back, for example, EFCC, ICPC etc.”
News
Sun International Finalizes $14.4M Exit from Nigeria, Sells Interests to RFC
Sun International Limited, run by Anthony Leeming, South African entrepreneur, has agreed to sell its Nigerian interests to Rutam Finance Company Limited (RFC) for roughly $14.4 million.
The move is part of Sun International’s strategy to consolidate operations and focus on key markets. Sun International joined the Nigerian market in 2009, but has struggled in recent years due to a challenging operating climate.
This divestiture is consistent with the company’s strategic objectives and represents a shift in portfolio management.
Sun International, will sell a 43.3 percent ownership investment in Tourist Company of Nigeria PLC (TCN), which manages Lagos’ Federal Palace Hotel, to RFC for $1.875 million.
In addition, the group would pay off its whole $12.675 million credit to RFC, effectively exiting the Nigerian market. The corporation also intends to sell its remaining 6% ownership in TCN in due course.
The transaction, subject to customary closing conditions including as regulatory approvals, is estimated to create a cash inflow of about $14.41 million for Sun International.
These funds will be utilized to reduce debt.
Following the completion of the acquisition, TCN will no longer be included in Sun International’s financial statements.
This will reduce group debt by about $41.82 million, excluding IFRS 16 lease liabilities.
The closing is scheduled for no later than May 28, 2024, provided that all usual closing conditions are met. The Nigerian Competition Authority, the Securities and Exchange Commission, and the Nigerian Stock Exchange have all provided key clearances.
Sun International, founded in 1968 by the late Sol Kerzner, has grown into a renowned gaming and resort company under Leeming’s leadership.
In fiscal 2023, the company’s revenue increased by 7% to $646.14 million, while headline earnings increased by 86 percent to $55.35 million.
This demonstrates Sun International’s resiliency and strategic direction. Sun International’s pullout from Nigeria demonstrates the company’s dedication to streamlining its portfolio and pursuing growth possibilities in key areas.
With a rich history and a focus on the future, this transaction demonstrates the company’s commitment to create wealth for shareholders and stakeholders while also strengthening its position in the gaming and hospitality industries.
News
Sam Darwish, US-Nigerian Businessman Suffers $6m Loss as IHS Shares Plunge
Sam Darwish, a US-Nigerian telecom entrepreneur, has experienced a huge financial setback in his holding in IHS Holdings following a recent drop in the shares of the top telecom infrastructure company on the New York Stock Exchange (NYSE).
According to data, Sam Darwish’s investment in IHS Holdings has lost $6 million in market value during the last 13 days. This drop reflects increasing selling pressure among NYSE investors.
From March 12 to 30, Darwish’s investment in IHS Holdings increased from $35.17 million to $49.27 million, resulting in a $14 million gain.
Darwish founded IHS Holdings in 2001, and it has since grown to become the largest telecom infrastructure business in Africa, Europe, Latin America, and the Middle East.
It is renowned for its huge tower count and is the world’s third-largest independent international tower firm.
In the last 13 days, IHS Holdings shares on the NYSE have dropped by 11.72 percent, from $3.67 on April 3 to $3.24 at the time of writing.
As a result, the company’s market capitalization has dropped below $1.1 billion, causing significant losses for stockholders.
As chairman and CEO of IHS Holdings, Sam Darwish holds a critical position in African telecom.
With a strong 4.17 percent ownership holding, equivalent to 13,958,158 ordinary shares, he is a key participant in the global telecom infrastructure business.
The recent double-digit loss in IHS Holdings shares has resulted in a $6 million decrease in the market value of Darwish’s shareholding in the top telecom infrastructure company. His shareholding has decreased from $51.23 million on April 3 to $45.22 million.
Despite this defeat, Darwish remains an important figure in the worldwide telecom business.
IHS Holdings’ extensive tower network and smart acquisitions have secured its position as a major participant in the global telecom infrastructure sector.
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