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NNPC pipeline vandalism up by 50% in January, may suspend crude oil production

NNPC has stated that vandalism of its pipelines across the country rose by a phenomenal spike of 50% in January 2020.

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The Nigerian National Petroleum Corporation (NNPC) has stated that the vandalism of its pipelines across the country rose by a phenomenal spike of 50% in January 2020.

This information is part of the monthly financial and operations report, which was released on Wednesday, April 22. 2020 in Abuja.

According to the General Manager, Group Public Affairs Division for NNPC, Dr. Kennie Obateru, 60 pipeline points were vandalized compared to 40 incidents recorded in December 2019. Atlas Cove-Mosimi and Mosimi-Ibadan axis pipelines accounted for 50% and 17% of the breaks respectively, with the remaining 33% being accounted for by all other routes.

It was, however, noted that NNPC was collaborating with the local communities and other stakeholders to curtail this menace.

(READ MORE: NNPC GMD gives reasons for shutdown of refineries, to get private managers)

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The report also stated that Nigeria recorded crude oil and gas export sales of $434.85 million in January 2020. This represents an increase of 94.30% when compared to the figure in December 2019.

NNPC pipeline vandalism up by 50% in January, may suspend crude oil production

According to the NNPC spokesman, the month’s crude oil export sales contributed $336.65 million as against the $136.36 million for the previous month. It added that the export gas sales in January were $98.2 million, even as it noted that the crude oil and gas transactions from 2019 to January 2020, valued at $5.18 billion was exported.

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It was noted that 1.2 billion litres of premium motor spirit (PMS), known as petrol which translates to 38.68 million litres per day, were supplied for the month of January.

In the gas sector, out of the 253.09 billion cubic feet (BCF) of gas supplied in January 2020, a total of 151.16 BCF of gas was commercialized, consisting of 36.20 BCF and 114.96 BCF for domestic and export market respectively.

(READ MORE: TCN, NNPC partner to boost gas availability, increase power supply)

The report stated that 59.89% of the average daily gas produced was commercialized, while the balance of 40.11% was re-injected, used as upstream fuel gas or flared. The gas flare rate was 7.90% for the month under review compared to 8.46% for the period of January 2019 to January 2020.

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READ MORE: Naira crashes further at the parallel market due to dollar scarcity, lowest since 2017

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Out of the 1.167.80 mmscfd of gas supplied to the domestic market in January 2020, about 639.70 mmscfd of gas, representing 54.78%, was supplied to gas-fired power plants, while the balance of 528.10 mmscfd or 45.22% was supplied to other industries.

The gas delivered to gas-fired power plants in January 2020 generated an average power of about 2,683 MW compared with the 2,498MW that was generated in December 2019.

Meanwhile, the NNPC has given a hint that it might suspend crude oil production if the global price slump and low demand persist.

This was disclosed by the NNPC spokesman, Kennie Obateru, during an interaction with the press.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Financial Services

Era of backlog of unsettled claims is over – NAICOM boss

NAICOM has stated that it will monitor and sanction insurance companies who fail to settle claims as at when due.

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NAICOM

The National Insurance Commission (NAICOM) is out to seriously sanction any insurance companies with huge unsettled claims.

This disclosure was made by the Commissioner for Insurance, Mr. Sunday Thomas, at the on-going 2020 Insurance Directors’ Conference, jointly organized by NAICOM and the College of Insurance & Financial Management (CIFM), held at the Oriental Hotel in Lagos.

Mr. Thomas reiterated the need for the operators, post-pandemic, to appropriately strengthen their human and financial capital for effective participation in big-ticket risks to take advantage of the obvious gains of the domestication policy in the Nigeria Content Development Act 2010.

In his words, Mr. Thomas stated, “More businesses especially in the oil and gas and the Aviation sectors are now being reinsured abroad. Of more concern is the declining participation of life companies in the annuity business, which is the emerging business for our industry.

“These are the areas where the industry can impose itself on the economy through the control of funds for national development. The industry must invest handsomely in technology, one of our key drivers for developing the market.

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“The Institutions should be prepared to digitalize their processes, procedures, and systems, in order to make their operations seamless and real-time. The Commission is investing heavily in automating its processes and expects nothing less from the insurance institutions. An industry Information Technology Guideline has been issued for the operators and the Commission requires your support and cooperation for effective compliance.”

(READ MORE: FG seeking FDI to develop Special Economic Zones – Trade Minister)

Why this matters

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Prompt settlement of claims should be a top priority for the insurance operators in achieving an excellent and responsive customer service experience. Settlement of claims has been a serious nightmare for quite a number of customers, resulting to the abysmally low insurance culture in Nigeria.

Customers are more likely to patronize the insurance companies that are prompt in claims settlement and by extension improve the industry penetration in the market.

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Financial Services

Total credit to the economy rose to N19.54trillion – CBN Governor

The CBN revealed during the MPC meeting that the total credit to the economy rose to N19.54tn as of the end of November 13.

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The CBN Governor, Godwin Emefiele, has disclosed during the Monetary Policy Committee meeting that the total credit to the economy rose to N19.54tn as of the end of November 13.

According to him, the aggregate domestic credit grew by 7.6% in October 2020 compared with 7.35% Month-on-Month in September.

In his words, “Total gross credit by the banking industry stood at N19.54tn as at 13th November 2020 compared with N19.33tn at end-August 2020, an increase of N290.13bn. When compared with N15.56tn at the commencement of the LDR policy in May 2019, total gross credit increased by N3.97tn.”

According to Emefiele, the composition of the loans are N738bn to Manufacturing, General commerce N874bn, Agric and forestry N301bn, Construction N291bn, ICT (N231bn), etc.

In the month of October 2020, he stated that 86.23% of the total loans granted to over one million customers by banks were at interest rates considerably below 20% per annum.

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(READ MORE: N200 billion Unclaimed Dividend: Securities dealers reject FG’s plan to manage fund)

Bottom line

The MPC was quite optimistic and favorably disposed about the future impact of the disbursements from agri-business/Small and Medium Enterprise Investment Scheme of the sum of N92.90bn to 24,702 beneficiaries; Anchor Borrowers Program – N164.91bn disbursed to 954,279 beneficiaries; and COVID-19 Targeted Credit Facility to household and SMEs, with the sum of N149.21bn to 316,869 beneficiaries.

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Economy & Politics

Bus fare paid by Nigerian commuters increased by 68.8% in October 2020

The average fare paid by Nigerian commuters for a bus journey intra-city spiked by 68.82% from N190.86 recorded in October 2019 to N322.22 in October 2020

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Mile 2 Road

The average fare paid by Nigerian commuters for bus journey within the city spiked by 68.82% year-on-year from N190.86 recorded in October 2019 to N322.22 in October 2020. This was contained in the transport fare watch report, released by the National Bureau of Statistics (NBS).

The Transport fare watch report for the month of October 2020 covered the following categories namely: bus journey within the city per drop constant route; bus journey intercity, state route, charge per person; air fare charge for specified routes single journey; journey by motorcycle (Okada) per drop; and waterway passenger transport.

According to the report, the average fare paid by Nigerians for a bus journey within a city also increased by 4.03% when compared to N309.73 recorded in September 2020. Meanwhile, States with the highest bus journey fare within the city were Zamfara (N585.34), Bauchi (N504.78), and Cross River (N431.04); while States with the lowest bus journey fare within the city were Abia (N192.11), Kebbi (N205.47), and Borno (N208.15).

Highlights

  • Average fare paid by commuters for bus journey intercity increased by 9.25% to N2,209.84 as against N2,022.7 recorded in September 2020, while it increased by 35% compared to N1,636.86 recorded in the corresponding month of 2019.
  • States with the highest bus journey fare intercity were Abuja FCT (N4,376.09), Lagos (N3,073.41), and Sokoto (N3,055.12); while States with the lowest bus journey fare intercity were Bayelsa (N1,473.67), Enugu (N1,560.00), and Bauchi (N1,560.49).
  • Average fare paid by commuters for journey by motorcycle per drop increased by 3.88% month-on-month and by 115.50% year-on-year to stand at N265.41 in October 2020 from N255.51 and N123.16 respectively.
  • States with the highest journey fare for motorcycle per drop were Niger (N1,476.40), Kogi (N372.45), and Rivers (N352.47); while states with the lowest journey fare for motorcycle per drop were Adamawa (N78.49), Katsina (N106.20), and Kebbi (N135.75).
  • In terms of air travel, the average fare paid by passengers for specified routes single journey decreased by -1.70% when compared to N36,884.59 recorded in September 2020. It however increased by 18.42% (year-on-year) to stand at N36,256.08 as against N30,615.43 recorded in October 2019.
  • States with the highest air fare were Anambra (N38,500.00), Cross River (N38,460.00), Jigawa (N38,250.00); while States with the lowest air fare were Akwa Ibom (N32,750.00), Sokoto (N33,250.00), and Gombe (N34,800.00).

What you should know

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Nairametrics reported in October that the average fare paid by commuters for a journey by motorcycle per drop, more than doubled in September 2020 when compared to the corresponding month in 2019, increasing by 111.11% to stand at N255.51 in the month.

Bottom line

The persistent increase in the prices of transport fares across the country is a resultant effect of the Covid-19 pandemic, which necessitated drivers and transporters to reduce the number of commuters they carry at a time.

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This is in line with the health measures implemented by the Federal government to help curb the spread of the corona virus in the country.

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