Brent crude prices dropped on Thursday morning, reversing the gains recorded yesterday, on reports that supply will rise if major crude oil producers fail to reach an agreement on crude oil output cuts that have helped in stabilizing crude oil prices since the start of COVID-19.
Brent crude lost 1.14 %, to trade at $39.38 a barrel at 3:40 am Nigerian time, failing to stay over the $40 resistance price level.
OPEC members such as Nigeria and Iraq have shown weak compliance in meeting their crude oil production reduction targets set last month.
“Overall, the market is moving in the right direction with the gradual easing of the lockdown. But we still need to be cautious. There is always a risk of another wave of the coronavirus,” the first OPEC source said.
“The other thing is how quickly demand patterns will recover. Inventories are still above average levels and that needs to be tackled.”
OPEC+ had initially agreed to reduce crude oil production by a record 9.7 million barrels per day, or about 10% of global production of crude oil, for the month of May and June in order to minimize the damage caused by COVID-19 pandemic in weakening global demand for crude oil.
Meanwhile, OPEC+ private sources reportedly told Reuters that Saudi Arabia and Russia have agreed on a precursory deal to extend oil production cuts by one month while putting pressure on countries with poor compliance such as Nigeria and Iraq to deepen their oil production cuts.
What you should know about OPEC+: OPEC + came into light in late 2016 as a means for major oil-exporting countries to exercise their control over crude oil prices. Essentially, OPEC+ is an amalgamation of OPEC (Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates, Venezuela) and high oil-exporting non-OPEC countries like Mexico, Oman, South Sudan, Kazakhstan, and Russia.
Rather than reducing crude oil production cuts in July, OPEC+ was deliberating on keeping those cuts beyond June.
“Saudi Arabia and Russia are aligned on the extension for one month,” one OPEC source said.
“Any agreement on extending the cuts is conditional on countries who have not fully complied in May deepening their cuts in upcoming months to offset their overproduction,” the private source told Reuters.
“I don’t think there will be a meeting on Thursday. There are still many challenges,” another OPEC source added.
Senate rules out the use of unclaimed dividends to fund 2021 Budget
The Senate has ruled out the Federal Government’s proposed plan to use unclaimed dividends to fund the 2021 Budget.
The Nigerian Senate has ruled out the use of unclaimed dividends to fund the 2021 Budget.
The objection was raised by Senator Suleiman Kwari, the lawmaker representing Kaduna North District Zone I, at today’s senate plenary in Abuja.
While speaking on the creation of an unclaimed dividend and unutilised bank balance trust fund where dividends declared and unclaimed will be held, as stipulated in the 2020 Finance Bill, Kwari said the subsequent request of these dividends by the owners would deter the government’s activities if relied on.
Kwari called on the Federal Government to rule out the use of unclaimed dividends to fund the 2021 budget and consider a more sustainable and relatively option like the Pension Fund Administrative instead.
What they are saying
Speaking at the Senate plenary today, Senator Suleiman Kwari said: “I wish to commend some of the ways the Executive has put before us, measures to fund the 2021 budget. Some of them are really commendable. But Some of the ways here might be counter-productive.
“I want to single out the use of unclaimed dividend to fund the 2021 budget. I think it should be reviewed by the Executive because if eventually, the owner of these funds come up to claim them, the fund will not be readily available for use.
“I urged the Federal Government to look at something like the Pension Fund Administrative instead of hoping on the unclaimed fund.”
What you should know
- The Securities and Exchange Commission earlier this year disclosed that the total value of unclaimed dividend in the Nigerian capital market closed 2019 at N158.44 billion, with over N100 billion of the dividend from unclaimed shares.
- However, the House Committee on Capital Markets and Institutions raised an alarm over the growing unclaimed dividends in the capital market, which was projected to cross the N200 billion mark at the close of 2020.
- Following this projection, Mrs Zainab Ahmed, Nigeria’s Minister of Finance at a webinar organised by KPMG in collaboration with the Ministry of Finance, Budget and National Planning, disclosed that the Federal Government was considering the creation of an unclaimed dividend and unutilised bank balance trust fund where dividends declared and unclaimed will be held.
- Through this, the unclaimed dividends would be handed over to the government, as trustee, in the perpetual fund created under the supervision of the CBN & DMO, with private sector involvement in the governance of the fund.
WorldRemit and The Nest partner to empower entrepreneurs in Nigeria, 3 others
WorldRemit has partnered with The Nest to empower entrepreneurs in Nigeria, Kenya, Ghana, and Zimbabwe.
WorldRemit, a global fintech platform, has partnered Nigeria’s tech innovation hub, The Nest, to empower entrepreneurs in Nigeria, Kenya, Ghana, and Zimbabwe.
This was disclosed by the company via a statement issued on Wednesday, and seen by Nairametrics.
According to the statement, the partnership is to build scalable business models across Africa via the WorldRemit Entrepreneurs Program.
In its quest to go beyond digitalizing payment methods across the globe, strengthen its renewed commitment to creating opportunities, and facilitate development in Africa, WorldRemit will now equip African entrepreneurs with effective skill sets and tools to build, innovate, and scale their businesses.
Country Manager (Nigeria and Ghana), WorldRemit, Gbenga Okejimi, explained that the partnership came right in time for impact, as many small businesses had taken a hit in the course of the tumultuous year.
He lauded the efforts of the team at The Nest Hub for their resolve at ensuring continuous education, and enabling a thriving environment for start-ups and small businesses.
He said, “Much of what Africa is today is due to its entrepreneurship, which is a key driver for socio-economic progress through significant job creation and innovation.
“At WorldRemit, we want to be known for fostering the African entrepreneurship spirit. We want to be a part of Africa’s future prosperity. By helping build entrepreneurs across our African markets, we are enabling growth and development.”
Co-founder, The Nest, Oluwajoba Oloba, explained that the Entrepreneurs Program will serve as a catalyst in building scalable business models across Africa as the continent enters into a new wave of business revolution.
He said, “The entrepreneurs will be equipped with effective skills and tools required to build and scale their businesses. The Nest definitely plays a big role in this important partnership, as the project partner leads the designing of the digital business course, otherwise known as the learning modules, that would be used in training selected entrepreneurs while also mentoring them on innovative ways to manage and scale their businesses.”
He added that beyond training and mentoring, The Nest provides entrepreneurs, creatives, start-ups, and small businesses with dynamic facilities and workspaces.
What you should know
- The WorldRemit Entrepreneurs Program will run simultaneously in Nigeria, Ghana, Kenya, and Zimbabwe, from November 2020 through January 2021.
- It is expected to empower 50 aspiring and budding entrepreneurs.
FG says vehicle owners to pay N250,000 to convert from petrol to autogas
FG says owners in the country will have to pay N250,000 to have their cars converted to autogas from petrol.
The Federal Government has revealed that vehicle owners in the country will have to pay N250,000 to have their cars converted to autogas from petrol.
This disclosure was made on Wednesday, December 2, 2020, by the Technical Adviser on Gas Business and Policy Implementation to Minister of State for Petroleum, Justice Derefaka, while on Channels Television’s Sunrise Daily, which was monitored by Nairametrics.
While stating that the conversion of vehicles from petrol to autogas will take at least 7 hours at the various conversion centres, Derefaka also pointed out that vehicle owners will have different payment plans to perform the conversion.
What they are saying
Derefaka, who is also the Programme Manager, Nigerian Gas Flare Commercialization Project, said:
“The cost varies. So, in terms of cost implication, it depends on the cylinder of the vehicle and of course, for a typical SUV cylinder, it is a bit higher. On the average, it is around N200,000 to N250,000 and this is for a four-cylinder vehicle, but it becomes a little bit higher for a six-cylinder SUV vehicle.”
Nairametrics earlier reported that the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mele Kyari, disclosed that the corporation is going to provide free conversion services in some selected NNPC retail filling stations across the country.
Derefaka further explained that there will be different payment plans for making the conversion, adding that vehicle owners can have agreement with commercial banks to get the conversion done.
He also said, “The owner of the car basically will decide to say I want to run on autogas or CNG or LNG and like the Honourable Minister had mentioned as well, conversion basically has different strands, you can partner with your bank and then the bank will now agree with the conversion centre to say ‘Convert this our customer’s car for free.’
“Not free in its entirety, but you now go and covert your vehicle. What happens is that the installer will put some form of mechanism, that each time you buy the gas; a certain amount will be deducted to pay for the conversion kits.”
While dismissing the notion amongst many Nigerians that the conversion fee is expensive, the ministerial aide noted that payment can be done within 5 to 7 months, in addition to saving up 45-50% cost associated with petrol.
What you should know
- The Federal Government had on Tuesday launched the autogas scheme, called the National Gas Expansion Programme.
- The programme involves the conversion of fuel-powered cars and generators from petrol to gas, and is aimed at deepening domestic usage of natural gas in its various forms.
- The programme is also in line with the Federal Government’s plan to make gas the first choice source of cheaper and cleaner energy. This follows the deregulation of the downstream sector of the oil industry with sharp increases in prices of petrol.
- The Minister of State for Petroleum Resources said that the availability of Autogas as an alternative fuel option will afford Nigerians cheaper, cleaner and additional choice of fuel. Cheaper than the price of petrol and better for automobile and other engines.