Economy
Dangote tells NNPC, oil marketers to stop importing petrol, says refinery has enough
The President and Chief Executive of Dangote Industries Limited, Alhaji Aliko Dangote, says his refinery has the capacity to surpass the daily fuel needs of the country.
To this end, he urged the Nigerian National Petroleum Company Limited (NNPCL) and other fuel importers to stop importation.
The advice, if realised, is expected to save the country several billions of dollars in fuel importation and ease its corresponding strain on the naira.
Dangote disclosed this on Tuesday at the Villa after a meeting with President Bola Tinubu on the naira-for-crude policy.
The Minister of Finance, Wale Edun, and the Group CEO of the NNPCL, Mele Kyari, attended the meeting.
Dangote said he told the President that his refinery is ready to supply over 30 million litres daily with enough supply of crude.
He said the technical committee is doing the work and if there is any issue after that, the Minister of Finance and Coordinating Minister of the Economy will give guidance before it is escalated to the President.
According to him, “At full capacity we can even supply whatever is being consumed because what I estimated as our consumption is about 30-32 million litres which we can even start producing by next week.
“As we speak today. We have 500 million litres in our tanks. With that even if there is no production anywhere or no import that will take the country more than 12 days.
“So, we are more than ready and I am also putting my name on the line by telling Mr President that we will be able to supply the market 30 million per day and we are ramping up”.
Dangote added that, “On the streets what you have to understand is that we are producers. I have a refinery, and I am not in the business of retail.
“If I am in the business of retail you can hold me responsible, but what I am saying is that the retailers should please come forward and pick. If They don’t come forward and pick, what do you want me to do”.
He said he is expecting that the NNPCL and the marketers will stop importing, adding that he was losing money keeping product in tanks.
“I don’t know if you understand what it means to keep half a billion litres in our tanks, it is costing me money. Everyday if I am to collect money I can charge 32 percent in interest.
“That is what I am losing, and you are talking about 500 billion. If they come and collect then you will not see any queue in the filling stations”.
He said coming to the refinery to lift fuel should not be difficult since the NNPCL and other marketers have been doing that with importation.
“We have what it takes for them to come and collect, we are not retailers and we don’t have trucks, but we have a factory where we can load, come and pick and distribute and they have been doing that with importation.
“Since they have been doing that with importation I see no reason why they should not come and collect and distribute”, he stated.
Economy
Naira records significant appreciation against dollar
The naira appreciated significantly at the official foreign exchange market to end the week stronger.
FMDQ data showed that the naira strengthened to N1,531.20 against the dollar on Friday from N1,548.59 on Thursday. This showed that the naira gained N17.39.
Meanwhile, on the black market, the naira closed at N1,660 per dollar on Friday from N1,650, exchanged on Thursday.
In the week under review, the naira recorded more gains than losses.
This comes as the naira gained N16.38 per dollar on a week-on-week basis.
During the week, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, said that the country’s economy is expected to grow in 2025.
Economy
Nigeria’s debt stock surges to N142trn on weak naira
Nigeria’s public debt profile has yet again increased by N8.02 trillion to N142 trillion as of the end of September 30, 2024 driven by the depreciation of the naira that has continued to affect the country’s cost of external obligation.
According to data published by the Debt Management Office (DMO) on Tuesday, the spike represented a 5.97 percent increase from N134.3 trillion recorded in the second quarter of 2024.
The debt, comprising external and domestic obligations, reflects the significant impact of exchange rate depreciation on external borrowings when converted to naira terms.
With the exchange rate weakening from N1,470.19/$ in June to N1,601.03/$ by the end of September, Africa’s fourth largest economy has as much as N68.88 trillion ($43 billion) as its foreign debt, accounting for 48.4 percent of the total debt stock.
In naira terms, external debt surged by 9.22 percent, rising from N63.07 trillion to N68.89 trillion within the quarter.
A more cursory look at the data showed that the Nigerian government relied more on domestic borrowings as it accounted for 51.6 percent of total debt profile, with the FGN taking N69.2 trillion and state governments having N4.2 trillion as their debt.
Domestic debt reduced by 5.34 percent in dollar terms, falling from $48.45 billion in June to $45.87 billlion in September. In naira terms, it rose by 3.10 percent from N71.22 trillion to N73.43 trillion during the period.
The Federal Government’s external debt accounted for $38.12 billion in September, up from $38.01 billlion in June, while states and the Federal Capital Territory held $4.91 billlion in external debt, a slight increase from $4.89 billion.
For domestic debt, the Federal Government’s obligations rose from N66.96 trillion to N69.22 trillion, while states and the FCT recorded a minor reduction from N4.27 trillion to N4.21 trillion.
Overall, Nigeria’s total public debt in dollar terms fell by 2.70 percent, from $91.35 billion in June to $88.89 billlion in September.
However, Nigeria’s debt stock has grown from 78.13 percent recorded in June 2024 to 78.95 percent in September 2024, defying the DMO’s self-imposed public debt ceiling of 40 percent, as outlined in the agency’s Medium-Term Debt Management Strategy.
Although the current public debt-to-GDP ratio of about 55 percent is slightly below the IMF’s 60 percent benchmark for emerging market countries, the nation’s weak revenue profile and FX volatility risks could further escalate debt levels, straining the already strained economy.
Rising public debt means elevated debt-to-service cost. The rising debt profile, particularly in naira terms, raises concerns over debt sustainability, especially with the exchange rate volatility driving up the local currency cost of external obligations.
Analysts have expressed concerns over the rising debt levels, warning that it could trigger a debt crisis for a country that’s reeling from its worst cost of living crisis in a generation.
While the exchange rate has begun to show reduced volatility due to the various central bank’s policies, analysts believe that the proposed tax reforms, if passed, might help Nigeria boost its revenue base and lower borrowings.
Credit: Businessday NG.
Economy
US oil imports from Nigeria to drop as Trump plans energy emergency order
The President Trump planned an executive order and declaration of a national energy emergency, targeted at enhancing the United States oil and gas production could impact on Nigeria’s oil demand and revenue generation.
This was even as prices of oil, including Nigeria’s Bonny Light dropped to $80 per barrel from $83 per barrel, yesterday, as traders await U.S. President-elect Donald Trump’s inauguration in the hope of some clarity on his policy agenda.
However, the United States used to import a bulk of its crude oil from Nigeria, but the commencement of shale oil, deliberate government policy and other factors, reduced the nation’s oil and gas import in recent times.
Despite the reduction, recent data indicated that the United States oil and gas import from Nigeria was worth $4.73 billion in 2023.
According some experts, the revenue would likely decrease in 2025 and beyond following President Trump executive order and declaration of a national energy emergency.
In an interview with Vanguard, yesterday, an economist and Chief Executive Officer, Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf, said: “Naturally, if investments in oil and gas increase in the United States and the US of course is a major oil producer that will increase the global supply. If global supply increases, energy prices are likely to fall.
“So, if energy prices fall, of course, that has implications for our own revenue. So it’s likely to negatively impact on our oil price, on our oil revenue but it may be positive for businesses because a reduction in crude oil price or commodity or global oil price typically reduces the cost of petroleum products, including the Premium Motor Spirit, PMS, also known as petrol, diesel and jet fuel.
“However, it’s a double-edged sword as changes, if the price increases; it will favour the government and penalize the private sector, who uses energy. If the price drops, it penalizes the government and benefits the citizens and investors because their energy costs will drop.
“That is one implication of the Trump presidency. The second implication is, if he’s able to calm down the situation between Russia and Ukraine. Russia is a major oil producer as well, a major gas producer.
“So, he’s able to calm down Russia and Ukraine and he has the potential to do that because it is part of the commitment that he has made.
“If he’s able to do that, then we are likely to see more production of oil. We are likely to see the lifting of sanctions on Russia and if that happens, oil production will increase and prices will fall. Again, that will affect revenue negatively, but it will benefit businesses because cost of energy will drop.
“So, that is the nexus for me between what is happening with Trump policies and our domestic economy, especially the oil and gas sector.”
On his part, a Port Harcourt-based energy analyst, Dr. Bala Zakka, said: “Major importers from Nigeria, indirectly encourage our nation to be lazy, exporting crude oil instead of processing to add more value to the economy.
“I strongly believe that by reducing importation through his policies, President Trump would encourage increased refining in Nigeria and other African nations. We need to expand our refining capacity to refine more petroleum product and derivatives, capable of adding value to the domestic economy.”
Also, the National President of Oil and Gas Service Providers Association of Nigeria, OGSPAN, said: “Every nation continuously reviews its environment and takes decisions on the best ways and means to grow its economy. Nigeria should do the same in order to reduce dependence on oil and other economies.”
Meanwhile, the Petroleum Products Retail outlets Owners Association of Nigeria, PETROAN, has assured consumers that the coming on stream of the Dangote Refinery and the NNPC Limited owned Port Harcourt refinery would ensure easy flow of petrol during the Yuletide season.
PETROAN in a statement by its National Public Relations Officer, Dr Joseph Obele said the petrol supply agreement reached with the 650,000 barrels per day Dangote Refinery would avert any possible shortage of premium motor spirit during the period.
This, according to Dr Obele, is due to the efforts of PETROAN distribution technical committee incharge of planning and execution of zero-fuel scarcity strategy.
“We are happy that Nigerians are going to travel effortlessly during this period of the year”, the Group added.
Recall that the National President of PETROAN, Dr Billy Gillis-Harry, on Monday 2nd December 2024 led the negotiation team of the association to a fruitful strategic business meeting with the management of Dangote Refinery in Lagos.
PETROAN noted that the “sealing of a transactionary deal with Dangote Refinery was the aftermath of a successful buyer-seller negotiation and agreement secured by PETROAN at the strategic meeting.
“PETROAN National President commended the Vice President of Dangote group & Managing Director of Dangote Refinery, Mr. Devakumar V. G. Edwin, for his cooperation and strategies deployed so far to make petroleum products available to all Nigerians throughout the end of year festivities and beyond.”
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