Economy
FG plans cooking gas export ban to crash price
The Federal Government is to stop the exportation of Liquefied Petroleum Gas, popularly called cooking gas, in a bid to increase its volume domestically so as to warrant a crash in price.
It stated on Thursday that LPG producers in Nigeria and key stakeholders in the industry had been told to stop exporting the commodity out of Nigeria, following the recent jump in the cost of cooking gas.
Although the volume of LPG consumption in Nigeria depends on the specific timeframe, figures obtained from the Nigerian Midstream Downstream Petroleum Regulatory Authority indicated that in 2022, the total cooking gas consumption across the country was 1.4 million metric tonnes.
Data from the agency put total domestic production during the review period as 600,000MT, while imports accounted for 800,000MT.
In 2021, total consumption was estimated at around 800,000MT, as domestic production was about 300,000MT, while the volume that was imported in that year was put at 500,000MT.
Cooking gas consumption has been increasing significantly, with ambitious targets to reach five million metric tonnes by 2029, as LPG dealers stated that though Nigeria exports the commodity, the country relies heavily on imports to meet domestic demand.
This implies that the Federal Government could stop the export of over 600,000MT of cooking gas based on its drive to crash the price of the commodity locally.
Findings showed that the cost of refilling a 12.5kg cylinder of cooking gas in Abuja, Lagos, Kano and some other states had climbed to about N18,000. It was specifically N17,500 in Abuja on Thursday, a product that sold for less than N9,000 in November last year.
LPG dealers under the aegis of Nigerian Association of Liquefied Petroleum Gas Marketers had predicted mid last year that a 12.5kg cylinder would cost N18,000 going by the incessant hikes in its cost.
To tackle this, the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, constituted a committee in November 2023, headed by the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed.
But up till today (Thursday), the cost of the commodity has maintained a northward movement, as many LPG users are gradually shifting to the use of charcoal.
But while speaking on the sidelines of the internal stakeholders’ workshop in Abuja on Thursday, Ekpo stated that the Federal Government had asked LPG producers to stop exporting the commodity.
He named some international oil companies including Mobil, Shell and Chevron as producers, stressing that the government was interfacing with them to crash cooking gas prices.
In November 2023, a kilogram of cooking gas was about N700, but the product is now sold at about N1,400/kg. Some operators stated that the cost would increase further if the government fails to intervene.
Ekpo said, “With the issue of gas, you have seen the demonstration of the Federal Government by withdrawing all taxes and levies from the importation of gas related equipment. It is a big incentive.
“On the issue of LPG (cooking gas), we are interacting with the critical sectors to ensure that there is no exportation of LPG. All LPG produced within the country will have to be domesticated. And when this is done, the volume will increase and, of course, the price will automatically crash.
“I’m in contact with the regulator, NMDPRA, we have meetings almost on a daily basis and with the producers of the gas like Mobil, Chevron and Shell. So there is that hope that things will turn around.
“And that is also why we are having this engagement to know exactly what the problems are, so that we can address them once and for all.”
When told that the removal of Value Added Tax on LPG seems not to be reflecting on the cost of the commodity, the minister stated that cooking gas investors were trying to maximise their profit from the sale of the product.
“Excuse me, it is not going to reflect that way. We are dealing with human beings. A policy has been put in place and these people, the investors, want to maximise the profit that they are going to get from it all.
“So at the end of the day we had to come in, which is why you have the regulator. We are interfacing with them to make sure they crash the price. We are meeting with them on a daily basis,” Ekpo stated.
It was reported in December 2023 that the Federal Government had exempted the importation of LPG and its equipment from the payment of customs duty and Value Added Tax, as the move was expected to result in a drop in the cost of cooking gas across the country.
This was disclosed by the Federal Ministry of Finance in a letter (dated November 28, 2023) to the Special Adviser to the President on Energy; Comptroller-General of the Nigeria Customs Service; and the Chairman of the Federal Inland Revenue Service.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, signed the letter.
Meanwhile, when asked on Thursday to state when government vehicles would start running on Compressed Natural Gas as always championed by the government, the gas minister stated that he would speak on this later.
“The Presidential Initiative on CNG was set up before the inauguration of the ministers, but I’m interfacing with them. The Federal Government committee is working towards realising the goals. So the moment I get a clearer picture about it I will address you accordingly,” Ekpo stated.
Nigeria has over 208 trillion standard cubic feet of gas reserves and is now viewed as a gas-rich nation.
But most of the country’s gas resources remained untapped due to several reasons such as lack of investments in the sector, the shift from fossil fuels, policy issues, among others.
Ekpo was also asked whether the government would allow operators in the sector to run most of their transactions in naira, as against the popular practice of dollar transactions, and he said the matter would be discussed at the meeting by stakeholders.
“If you were there when the director on gas was presenting what we discussed during the stakeholders meeting on February 6, 2024, it (the concern) was presented, and I will have the views of the implementers and regulators today. Then from there we can take a decisive decision on how to address it,” the minister stated.
Earlier during his speech at the workshop, he said the aim of the event was to reposition the Nigerian gas sector for optimal performance, in line with President Bola Tinubu’s agenda to unlock Nigeria’s abundant gas resources for economic development and poverty eradication.
“This is the second in a series of engagements with stakeholders in the gas sector, the first being the consultative meeting I held with external stakeholders in the gas sector on February 6, 2024 which provided a platform for me to hear from the various associations and groups operating across the gas value chain with a view to understanding the pain points of the industry operators.
“It is my expectation that having heard from the operators in our industry, we as policymakers, regulators and policy implementers will internalise the feedback from our stakeholders and customers to proffer workable solutions to tackle the issues bedevilling our nation’s gas sector.
“With over 208 trillion standard cubic feet in proven gas reserves, Nigeria has no business with energy poverty, and it is imperative for us to rise up as a people to tackle these challenges head-on,” Ekpo stated.
He stated that as part of efforts to ensure a high level of performance and accountability within the Federal Government, the President, through the office of the Special Adviser on Policy and Coordination, had released the Presidential Priorities and Ministerial Deliverables for 2023 – 2027 to create a performance tracking mechanism for the Minister of Petroleum Resources and relevant agencies.
“The theme for this workshop – ‘Harnessing Nigeria’s Proven Gas Reserves for Economic Growth and Development,’ is very apt and provides a platform for us to galvanise action and take the necessary steps to release this nation’s abundant gas reserves to accelerate our industrialisation and develop the economy for the good of our teeming population,” Ekpo stated.
The Chief Executives of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Ahmed Farouk, and the Nigerian Upstream Petroleum Petroleum Regulatory Commission, Gbenga Komolafe, were in attendance at the internal stakeholders’ workshop on Thursday.
Representatives from other agencies under the petroleum ministry such as the Nigerian National Petroleum Company Limited, Petroleum Technology Development Fund, directors from the Federal Ministry of Petroleum Resources, among others, were also in attendance.
Economy
Nigerian govt announces N75bn single-digit interest loans for MSMEs
The Nigerian government has approved a N75 billion loan scheme with a nine per cent interest rate for 75,000 Micro, Small, and Medium Enterprises, MSMEs, across Nigeria.
Scheduled for launch in 2025, this scheme aims to foster economic growth by targeting women and youth-owned enterprises, creating jobs, and stimulating local economies.
Minister of Information and National Orientation, Alhaji Mohammed Idris, outlined the project’s goals at a town hall meeting in Abuja, noting its alignment with President Bola Tinubu’s Renewed Hope Agenda.
“This scheme is a concrete manifestation of Tinubu’s commitment to economic transformation. By focusing on MSMEs, which are the backbone of our economy, we aim to diversify income streams, boost exports, and provide valuable job opportunities,” he said.
The loan, a joint effort among the Federal Government, the Bank of Industry, BOI, and state governments, offers single-digit interest rates with individual loans capped at N1 million.
This move is expected to alleviate some of the challenges MSMEs face, particularly high production costs due to recent fuel subsidy removal.
The BOI’s Enugu Branch Head, Mrs Anuli Akabogu, highlighted this during a session in Enugu, saying: “The government understands the burdens MSMEs face; this fund is intended to ease the cost of production.”
At the sensitisation event in Akwa Ibom, Commissioner for Trade and Investment, John James, urged beneficiaries to prudently utilise the loan.
“This is an opportunity to scale your businesses responsibly. MSMEs drive economies globally, and we want the same for Nigeria,” he said.
To reach potential recipients, government agencies like the Corporate Affairs Commission, Federal Inland Revenue Service, and other partners have joined efforts, touring the nation to inform business owners of the application criteria.
In Kaduna, Governor Uba Sani, represented by his Special Adviser on Economic Matters, praised President Tinubu’s dedication to economic empowerment.
He noted: “This initiative proves Tinubu is a leader who listens to the needs of Nigerians. Through this, MSMEs will revitalise not just the local economy but bolster our national strength.”
BOI officials stressed the importance of following the correct application procedures.
Tola Adekunle-Johnson, Senior Special Assistant to the President on Job Creation, cautioned applicants against fraud.
“This loan has a fixed interest rate with no hidden fees. Visit any BOI branch to apply directly; don’t fall victim to middlemen,” he advised.
The scheme requires applicants to present key documents, including a federal civil service guarantor, to qualify.
Mr Michael Agidani, BOI manager in Ogun State, shared that the bank has already begun disbursing loans, with an initial N1 billion reaching MSMEs in the state.
As the rollout begins, the initiative’s reach is expected to improve national economic resilience, expand export capacities, and fulfill Tinubu’s vision of a revitalised Nigerian economy.
Economy
See Exchange Rate As Naira Appreciates At Parallel Market
Naira appreciated to N1,725 per dollar in the parallel market from N1,735 per dollar last week Friday.
But the Naira depreciated to N1,676.9 per dollar in the Nigerian Autonomous Foreign Exchange Market, NAFEM.
Data from FMDQ showed that the indicative exchange rate for NAFEM rose to N1,676.9 per dollar from N1,666.72 per dollar last weekend indicating N10.18 depreciation for the naira.
The volume of dollars traded (turnover) in the official market declined by 15.6 percent to $79.47 million from $94.2 million traded last week Friday.
Consequently, the margin between the parallel market and NAFEM rate narrowed to N48.1 per dollar from N68.28 per dollar last weekend.
Economy
SEE NAIRA Rates Against The USD, GBP, EURO At Parallel Market Today November 5, 2024
WHEN we look at this month, USD was traded at ₦1740 at the beginning of this November on Friday, November 1, 2024. As at today with USD being traded at ₦1,735 we see a -17.39% decline for United States Dollar to Naira exchange rate for this month.
On this page, we are primarily focusing on the Black Market Dollar To Naira Exchange Rate Today, the USD to Naira currency pair are the most traded currency in the FX market.
Black Market Exchange Rates
Buying Rate
Selling Rate
Dollar to Naira 1735 1720
Pounds to Naira 2270 2250
Euro to Naira 1872 1845
Canadian Dollar to Naira 1239 1232
Rand to Naira 52 43
Dirham to Naira 0 0
Yuan to Naira 62 62
G.Cedi to Nair 70 50
CFA F. (XOF) To Naira 0.83 0.81
CFA F. (XAF) To Naira 0.74 0.74
Having full knowledge how much USD to NGN black market exchange rate today will give you a better opportunity to plan and make informed decisions.
Nairatoday.com
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