Business News
Minister highlights why Petroleum Industry Bill needs to be passed by mid-2020
Timipre Sylva has disclosed that a new Petroleum Industry Bill (PIB) would be sent to the National Assembly next week.
The Minister of State for Petroleum Resources, Timipre Sylva has disclosed that a new Petroleum Industry Bill (PIB) would be sent to the National Assembly next week in order to pass it into law by mid-2020.
According to Sylva, the non-passage of the bill has been a challenge as it has hampered and delayed investments coming into the oil sector. He emphasized that the lack of a bill brings a lot of uncertainty to the investment climate, therefore, its passing is essential to attract the much-needed funding to Nigeria’s oil sector.
Senate President, Ahmed Lawan
Why this matters: Over the years, there have been various reviews of the bill under different administrations, however, it has never been signed into law. This has affected the oil sector and in turn the country negatively.
When the bill is finally signed into law, it would help in pushing oil companies and investors to invest in Nigeria’s oil sector, thereby stimulating growth and increasing government revenues.
More details: Reuters reported that the most recent version of the bill was sent during President Muhammadu Buhari’s first term. However, there were disagreements between the lawmakers and the executive which led to its rejection.
[READ MORE: Revenue from petroleum resources not enough for Nigeria – Buhari)
Nevertheless, Sylva said the review had reached an advanced stage and was on it’s way to being adopted. Speaking further, he said although the ministry and the National Assembly were on the same page, he hoped international oil majors were also on board.
Oil workers
What you should know: The Petroleum Bill is one of the oldest bills in the Nigerian Legislature. It seeks to promote best practices in the management of the extraction of Nigeria’s oil and it was first introduced in 2008 by the then President Umaru Yaradua.
It is also intended to deregulate and liberalise the downstream petroleum sector, create efficient and effective regulatory agencies and promote transparency and openness in the administration of the petroleum resources in Nigeria.
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Business News
Cost of building materials rise by over 60% in one year
The price of building materials in the market experienced a rise of over 60% in the last one year.
The cost of Cement, Steel, Tiles and Plaster of Paris (PoP) cement, among others have risen by over 60% between March 2020 and March 2021.
For instance, the cost of steel, which was sold at N234,000 per tonne as of March 2020, had increased to N380,000 at the end of March 2021. This represents a 62% increase within the period under review.
While Dangote Cement increased from N2,600 to N3,800 (though it is sold at N3,600 in some areas in Lagos), Lafarge Cement and BUA Cement increased from N2,400 and N2,250 to N3,600 and N3,250 respectively within the same period.
The price hikes are not limited to the cost of steel and cement alone but also to other materials like Tiles, PoP cement, and roofing sheets.
The cost of super white cement increased from N2,500 (25kg) to N3,700, and the cost of high-quality white cement (40kg) also increased from N4,000 to N6,500.
The cost of gravel increased from N80,000 to N140,000; that of 8mm diameter and 25mm diameter (imported) increased from N234,000 and N245,000 to N330,000 and N380,000 respectively.
Doors are not left out in the hike. Costs of Flush door (high quality), Panel door and Turkish steel door (1,500 x 2,100) also rose from N35,000, N40,000, N165,000 to N60,000, N75,000 and N235,000 respectively.
Why the hike?
Industry experts have attributed the hike to persistent depreciation of the naira and the rising cost of other building materials.
Tunde Oluwole, a fellow of the Nigerian Institute of Builders, explained that the development was caused by high interest rate, inflation, increasing exchange rate and scarcity of forex in the country.
He said, “The increasing prices in Nigeria is a result of the combined effects of high-interest rates, devaluation of the naira, inflation, and non-effective distribution network of the materials.”
To Kolawole Adebisi, an Estate Developer, the development in the cement industry is caused by the ban of imported cement in the country.
He told Nairametrics that he is not against the ban, as the government’s intention is to boost local production of cement but explained that “the local manufacturers were unable to produce enough cement to meet the demand and this contributed to the rising cost of the product.”
