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ECONOMY

Nigeria loses N24bn monthly to imported energy

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The Federal Government has frowned at the recent report that N24 billion is being lost monthly to imported energy.

The government explained that the figure was the amount spent on importation of diesel, which many Nigerians rely on, to power their generators.

Minister of State for Power, Sulaiman Hassan, who made this known at the 24th monthly power sector stakeholders’ meeting in Abuja, Monday, insisted that Nigerians should seek alternative source of energy to complement government’s effort to improve power supply.

The government, however, insisted that high power consuming homes, offices and industries must generate their own source of power in order to enjoy reliable power supply.

He added: “The reports indicated that diesel importation has declined in the past two years, which is an indication that Nigerians now run their generators for few hours due to the intervention of other sources of energy.

“Nevertheless, the report further indicated that 300 million litres of diesel is being used by Nigerians to power generators every month. Regrettably, 75 per cent of the diesel is being imported and that had increased pressure on scarce forex.

“If 40 per cent of the imported diesel used for power generation in Nigeria is bought at the average retail price of N200 per litre, then the report that indicated that N24 billion was being lost monthly in the electricity industry to imported energy was correct.”

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ECONOMY

FACT CHECK: How Buhari got it wrong on Nigeria’s oil revenue

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Findings have proved Nigeria President, Mumammadu Buhari’s stand on oil revenue wrong.
At the peak of a meeting with a delegation of his support group on Tuesday, President Buhari had raised concerns about the utilisation of Nigeria’s oil revenue between 1999 and 2015.
Speaking during the occasion, he claimed that oil price averaged $100 per barrel under the previous administrations.
“I challenge anybody to check from Europe, America and Asia; between 1999-2014, Nigeria was producing 2.1 million barrels of crude oil per day at an average cost of $100 per barrel and it went up to $143.
“When we came it collapsed to $37 – 38 and later was oscillating between $40 and $50,” Buhari said.
This happens not to be the first time President Buhari has made this claim in public.
DAILY POST recalls that in his 2017
Independence Day speech, Buhari said: “we should remind ourselves of the recent journey from 1999-2015 when our country happily returned to democratic rule. However, in spite of oil prices being an average of $100 per barrel and about 2.1 million barrels a day, that great piece of luck was squandered and the country’s social and physical infrastructure neglected.”
Taking up the challenge by Buhari, checked out oil prices from 1999 till date.
A look at the Basket Price of the Organization of Petroleum Exporting Countries (OPEC) where the weekly, monthly, quarterly and yearly averages of oil prices based on daily quotations are published indicates that President Buhari’s oil price data are not accurate.
According to data obtainable from OPEC’s Basket Price, the average crude oil price from 1999 to 2015 was $61 a barrel.
As far as records of crude oil price has been kept throughout history, it never reached above $100, except in 2011 ($107), 2012 ($109.45) and 2013 ($105.87).
The highest price ever paid for crude oil was during late President Musa YarAdua’s tenure.
Between June and July 2008, a barrel of crude oil was sold around $130 to $147, although the average crude oil price in 2008 ended up being $94.45 per barrel.
Even at that, oil price dropped as low as $33.87 by December 19, 2008, and rose to $51.55 by April 24, 2009.
In 1999 when the military handed over power to Olusegun Obasanjo, the average crude oil price was $16.56 per barrel.
In 2003 when he was re-elected for a second term, average crude oil price rose to $28.05 per barrel and $69.08 per barrel in 2007. The average crude oil price during Obasanjo’s tenure from 1999 to 2007 was $37.18.

Oil price when President Buhari took over government in May 2015 was $62.51 per barrel and averages $77.61 as at today May 24, 2018.

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ECONOMY

FAAC shares N701bn among FG, States, LGs in April [Details]

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The Federal Government, states and local governments shared N701 billion as revenue for the month of April, the Permanent Secretary, Ministry of Finance, Mr Mahmoud Isa-Dutse, said on Wednesday in Abuja.
Isa-Dutse told newsmen that the amounts shared were the outcome of Federal Account Allocation Committee (FAAC) meeting.
Giving a breakdown of the revenue, which accrued in April, the permanent secretary said mineral revenue increased by N50.7 billion, that is from N360.51 billion in March to N411.2 billion in April.
He added that non-mineral revenue also increased by N81.25 billion, from N120 billion in March to N201.3 billion in April.
He noted that Value Added Tax (VAT) collected increased from N80.35 billion in March to N83.4 billion in April.
He indicated that “gross statutory revenue of N613 billion received for the month was higher than the N480.59 billion received in previous month by N132.45 billion.
“Crude oil sales volume increased by 64 per cent, compared with 7.72 million barrels from the previous month, resulting in increased revenue from the Federation Crude Oil Export Sales by 226.90 million dollars.
“Also, average crude oil price increased from 65.7 dollars to 66.78 dollars per barrel.
“Performance for the month in review would have been better but for a few production shut-ins and shut-downs at various terminals for repairs and maintenance.”
Isa-Dutse said looking at the significant increase in revenues, the federal, states and local government decided to save some of the month’s revenue for rainy day.
To this end, the permanent secretary said, N24.5 billion would be converted and added into the dollars denominated Excess Crude Account.
He added that “based on increased revenue for the month and after due consultation, it has been decided that we will take out N24.5 billion and credit it into the Excess Crude Account.
“This brings the Excess Crude Oil Account balance to 1.11 billion dollars and the Excess Petroleum Profit Tax Account is 0.133 billion dollars,” he said.
In summary, Isa-Dutse said, N276.53 billion was allocated to Federal Government, N140.2 billion to states and N108.1 billion was allocated to local governments.
On the issue of reconciliation of accounts with Nigerian National Petroleum Corporation (NNPC), Isa-Dutse said it was ongoing.
He explained that reconciliation of monies collected by revenue generating agencies was also ongoing.

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ECONOMY

Oil revenue to take a hit as buyers ignore Nigerian crude

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Projected revenue from the sale of crude oil may be affected as a number of crude cargoes from June loading programmes have remained unsold.
This is according to trading data received by Reuters.
Out of a total of 60 cargoes from the June loading, buyers have taken up 40 — at a time when July programmes have already been released.
Qua Iboe, Forcados and Bonga along with a few smaller grades released for July programmes were added to the unsold 20 cargoes leading to a large volume of Nigerian crude in the market.
Angola, another West African crude oil trader, has sold 42 out of the 43 cargoes it presented to traders although it was believed that Total sold a cargo at a discounted price to the current price of Brent crude.
As at 10:30am on Wednesday morning, Brent crude traded at $79 higher than the $51 crude oil benchmark for the 2018 budget.
Although the oil sector contributes less than 10 percent to the nation’s gross domestic product according to the latest report released by the National Bureau of Statistics, it accounts for more than 70 percent of the nation’s earnings.
Nigeria’s Bonny Light supply to the market is less than usual as a result of a force majeure declared by Shell after the shutdown of the Nembe Creek Trunk Line (NCTL).

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