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Aviation Gasoline Disaster: Why Refineries Should Work

There are indications that Nigeria is fast losing huge revenue and employment opportunities as the nation’s aviation industry continues to battle for fuel to power aircraft, FESTUS OKOROMADU in this report takes a look at the way out of the crisis.
The Nigerian petroleum industry is fast becoming a theatre of crisis even as those saddled with the responsibility of managing the sector constantly denyl the reality even as they continue to profile solutions that appears not to be working.
Just as 2016 was drawing to a close, Nigerians who wanted to travel by air were stranded at various airports as flights cancellation became the other of the day due to the absence of Jet A-1, the fuel use by airplanes.
Last week, the chairman of Airlines Operators of Nigeria (AON), Captain Nogie Meggison while addressing a press conference in Lagos, disclosed that 50 per cent flights cancellations in recent time across the country is due to lack of aviation fuel.
Another source claimed that nearly 30 per cent of scheduled commercial flights were cancelled at various airports across the country, with 70 per cent rescheduled owning to the inability of airlines to get aviation fuel locally to power their aircraft.
Meanwhile, these revelations are coming barely a few days after the management of the nation’s oil company, the Nigerian National Petroleum Corporation (NNPC) had assured operators of availability of 38.7 litres of the product that can last for more than 26 days.
A press statement from the corporation dated December 19, 2016 and signed by the Group General Manager, Group Public Affairs Division, Ndu Ughamadu, reads “In its bid to ensure a hitch-free air travel across the country during and after the yuletide period, the Nigerian National Petroleum Corporation (NNPC) has flooded the market with Aviation Turbine Kerosene (ATK) popularly called aviation fuel.”
While acknowledging the situation on ground, the Group Managing Director (GMD) of the corporation, Dr. Maikanti Baru, said there were reported cases of flight delays and cancellations across the country’s airport, stressing that the corporation had imported about 38.7 million litres of aviation fuel representing 26-day sufficiency as a step to forestall shortage of the product.
He said: “On December 14, 2016, the Corporation completed the discharge of 8,800MT which represented about 10.6million litres to major terminals in the country. In addition, as at this morning (December 19, 2016), 23,500MT which represented about 28.2million litres was being discharged to the oil terminals.”
He added that, “In order to sustain the tempo, the corporation has also secured the supply of additional 30,00MT vessel of ATK which represented about 36million litres expected to berth Nigerian shore before the end of the year.
Despite the assurance given by Dr. Baru, the disclosure by Captain Meggison implies that the reality on ground is different with the proclamations from the corporation.
The latest report from the aviation industry shows that the nation is losing on all fronts as a number of local and international airline operators now source for the product from other West Africa countries like Ghana, Gabon, Liberia and Sierra Leone for refueling even at a cheaper rate.
The impact of the diversion is not just restricted to the airlines as even oil marketers are losing as well. An expert describes the situation as a worrisome development, stating that as long as the sales is in huge volume, Nigeria ought to get involved, pointing out that it is bound to affect the country’s revenue and obligations to shareholders and staff.
Available records show that between 2014 and 2016 Nigeria has witnessed the worst scarcity of the commodity than ever before as import of the product was subject to fluctuations of foreign exchange rate.
It will be recalled that in 2016 alone, cost per litre of aviation fuel rose from N120 per litre to N175 and later to N250, while in some northern part of the country; it sold for as high as N270 per litre.
The situation however is very different in other West African countries such as Ghana where the product is sold at N110 per litre in Accra even as the Ghanaian government is said to have deliberately crashed the price of the product by 20 per cent recently to woo airlines from Nigeria.
Need For Urgent Rehabilitation of Local Refineries
Unlike what use to obtain in the not too distance past when Nigeria had functional refineries producing Jet A1 to meet the needs of domestic and international airlines, the product today is 100 per cent imported.
Consequently, Nigerian airlines are not only helping to create wealth and employment for other countries at a time when the country is in recession. For instance, the Ghanaian Airport Authority makes money each time an aircraft lands to pick up fuel, as such planes pays landing or parking charges.
Similarly, anytime these airlines shuttle to neighbouring countries to refuel, the Nigerian passengers suffers the inconveniences. For instance, an aircraft, which is supposed to have embarked on a straight flight from Lagos to Dubai or Lagos to Atlanta now gets to spend nearly half an hour on ground in Accra or Libreville just to get its tank refueled, thereby causing a big disruption on the original planned departure and arrival for such Nigerian passengers.
NNPC’s Renewed Promises
The Corporation recently announced that it is set to embark on a comprehensive rehabilitation of the nation’s three refineries located in Port Harcourt, Warri and Kaduna to achieve optimal capacity utilization in the New Year.

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BusinessLeadership

Operators Warn Towards Looming Collapse Of Tomato Paste Trade

Value-chain operators in the tomato paste industry have warned of the potential collapse of Nigeria’s N19 billion tomato paste manufacturing industry in the second quarter of 2017, if the federal government continues to back the forex policy in the country.
The operators claimed that the Central Bank of Nigeria’s (CBN) reluctance to amend its forex policy has boosted the importation of tomato paste into the country at the peril of local manufacturers.
LEADERSHIP recalls that Erisco Foods Limited, a former local tomato paste manufacturer in the country, had to shut down operations in the country, citing similar reasons.
Nigeria’s Union of Tomato Paste Manufacturers’ image maker, Mr. Nnamdi Nnodebe who spoke to LEADERSHIP on phone, lamented that the ban on triple concentrate tomato paste used as raw material by local manufacturers has left the local industry in a dilapidating condition.
According to him, “It makes better economics to import the raw materials that will enable production, grow the economy and keep jobs rather than importing the finished products or frustrating efforts to get the raw materials, thereby rendering millions of people jobless which might further kill the economy.
“The local packing industry can also form the hub for exports to the hinterland countries as there are adequate local capacities to more than cater to the domestic requirement. Using the ECOWAS benefits, this can be a huge foreign exchange earner for the country today and in the near future. Through the growth of the tomato industry, Nigeria can compete with China instead of buying the finished goods from them.
“It is important for the government to recognise that the packing industry is an essential component of the tomato paste value chain and without this sector, there can be no link between the farmer and the final consumer. Even if we develop our own triple concentrate manufacturing industry in future, the bulk of triple concentrate cannot be consumed in Nigeria alone as exportation of the local production will become more lucrative,” Nnodebe said.

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BusinessLeadership

MMM Seeks Huge On-line Publicity Forward Of Jan 13

With 10 days before the January 13, date which online Ponzi scheme, MMM Nigeria, would resume operations after freezing accounts of its participants in December last year, the promoters of the scheme have called on participants to begin online publicity of the scheme ahead of its resumption.
The scheme which has in its talons more than three million Nigerians on its website asked participants, whose accounts were frozen, to perform “Promo Tasks: A New Tool for MMM Community Development.”
MMM in a message to subscribers said the tasks, which would be done both online and offline, is expected to promote the scheme and drive “traffic and participation” by the time the handlers lift the freeze on January 13, 2017.
“Being an MMM member implies not only opportunities, but also a responsibility for the state and development of the MMM Community. MMM is our home, and we are responsible to build and refine it.
“A lot of participants genuinely want to promote MMM, spread its ideology amongst people, though not always knowing what exactly has to be done. Therefore we have created a new promo tasks section in the PO, which is added with various tasks: online and offline, easy and complicated, individual and team-oriented.
“A member who will perform these tasks will be benefited, because the tasks will allow him to attract new referrals, build his structure (and get bonuses for that), and it will be useful the whole Community, because more people will learn about MMM and its ideology.”
The message furthered that a “task may guide a member to join a Facebook group and write a comment to create some tweets on Twitter, like a YouTube video, share news on Google Plus, and make your website.

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BusinessLeadership

Customs Arraigns 2 Chinese language, Nigerian For Unlawful Exports

The Nigeria Customs Service (NCS) has arraigned two Chinese nationals before Justice Mohammed Hassan of the Federal High Court, Ikoyi, Lagos on two-count charge of storing and exporting prohibited items.
The suspected Chinese smugglers, Shu Xiang Quan and Wu Sheng He and one Nigerian, Ugochukwu Frank were arrested over plans to export tusks and unprocessed animal skin out of the country.
According to a statement signed by the Public Relations Officer, Federal Operations Unit (FOU) Ikeja, Jerry Attah, the three suspects have been remanded in Ikoyi Prison for trial. The statement also disclosed that the case has been adjourned to January 5th and 23rd, 2017 respectively.
Badejogbin David ESQ who led the legal team of the Nigeria Customs Service prayed that the court expedite the legal proceedings to serve as deterrent to others.
However, the Customs Area Comptroller (CAC), Mamudu Haruna said the seized tusks and unprocessed animal skin would be handed over to the Nigeria Environment Standards and Regulatory Enforcement Agency (NESREA) for further action. He said his Unit would not relent in its effort in intercepting all contrabands from either going out or coming into the country.
It could be recalled that in the month under review, 126 different seizures were recorded comprising raw hide/skin, elephant tusks, foreign parboiled rice, frozen poultry products, smuggled vehicles, Indian hemp and various general merchandise.
Meanwhile, the anti-smuggling arm of the Customs Service said it has generated a whooping N1.3 billion in the month of December 2016. Attah said the feat was achieved having intensified its anti-smuggling operations.
Giving a detailed account of how the revenue was generated, the command said it intercepted various contrabands with a duty paid value (DPV) of N894m while it generated N494 million from duty payments and demand notices on vehicles and other general goods.
The PRO said the intervention were from those that tried to beat the system from seaports, airport and border stations in the guise of false declaration, transfer of value.

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BusinessLeadership

NSE Evaluations Sectoral Indices, As Three Corporations Joins NSE 30

As part of end of year activities, the Index Committee of the Nigerian Stock Exchange (NSE) has undertaken a review of the NSE indices. The NSE in a release to media announced the expected review of the NSE 30, and the six sectoral indices of the Exchange, which are NSE Consumer Goods, NSE Banking, NSE Insurance, NSE Industrial, NSE Oil & Gas and the NSE Lotus Islamic Indices.
The review, which became operational, January 3, 2017, saw the entrance of two companies quoted in the agriculture sector, Okomu Oil palm and Presco. Also included was Conoil Plc, a downstream petroleum marketing company, while Diamond Bank, Fidelity Bank and Sterling Bank will leave the category.
The NSE also announced changes to its Insurance Index, as Equity Assurance Plc, Linkage Assurance Plc and Universal Assurance Plc were listed as companies to exit the NSE Insurance Index while incoming companies are Prestige Assurance Plc, Sovereign Trust Insurance Plc and Unity Kapital Assurance Plc.
Leading the category of the NSE Pension Index are Beta Glass Co. Plc, International Breweries Plc and Skye Bank Plc for United Capital Plc, Ecobank Transnational and Dangote Flour Plc as new entrants.
The NSE’s report on the review of the index composition, noted that there were no changes to the NSE Consumer Goods Index, the NSE Banking Index, the NSE Industrial Index and the NSE Oil and Gas Index.
The Nigerian bourse began publishing the NSE 30 Index in February 2009 with index values available from January 1, 2007. On July 1, 2008, The NSE developed four sectoral indices and developed the NSE Pension Index in 2013, with a base value of 1,000 points, designed to provide investable benchmarks to capture the performance of specific sectors.

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BusinessLeadership

SEC Investigating Complaints In opposition to Transglobe Funding & Finance

The Security and Exchange Commission (SEC) has ordered directors of Transglobe Investment and Finance Company Limited to appear before the commission over Investors’ N300 million.
The directors-Osita Ignatius Odili, Obasola Alao, Bariu Abdul Gaffar, Sunny Obidiegwu, Clement Obineze Maduako, and Alex Ekwueme were accused of failing to resolve various complaints of over N300 million filed by investors against the company.
SEC in a circular said the directors and their sponsors are expected to meet with the commission yesterday. The circular title: ‘Notice of Meeting with the Directors and Sponsored Individuals of TransGlobe Investment and Finance Company Limited’ said the commission was investigating the allegations.
“In a bid to resolve the complaints, the Commission had exchanged several correspondences with your company through the managing director, but your company has failed to resolve the complaints,” the commission said.
Capital market community has commended the leadership of the Securities and Exchange Commission on their efforts to abolish infractions from capital market. They said SEC decision countermand investors fear from capital market, saying the only way to grow the Nigerian capital market is for regulator to take a positive position to protect investors’ interest.
They stressed that investors would not have interest in market where there is infraction, saying SEC of today is playing its primary role as apex regulator in the Nigeria’s capital market. “If SEC refuses to protect our investment in the market, there is no way we will invest there,” they said.
The managing director of InvestDate Limited, Mr. Ambrose Omodion said what investors need at this critical period is regulator’s support. He noted that, “This is clear from the manner in which SEC’s management under Mounir Gwarzo has approached the institution’s core mandates: the regulation and development of the Nigerian capital market.
“The approach is to strengthen the legal constructs that govern the capital market while ensuring strict compliance to the rules and guidelines without fear or favour and, most importantly to achieve these in an environment of firmness and fairness in which there is a level playing ground for all players and other stakeholders.”

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BusinessLeadership

Inventory Market Data Downturn, Falls By N42bn

Trading on the Nigerian stock market fell by N42 billion yesterday, as it continued its bearish trend. The lead indicator, the NSE- All-Share Index (ASI) shed 121.85 absolute points or 0.46 per cent to close at 26,495.04 points. Similarly, the market capitalization declined by N42 billion to close at N9.116 trillion.
The downturn was strongly impacted by price depreciation recorded in a handful of large capitalized stocks, amongst which are Guaranty Trust Bank, Wapco, Forte Oil, Ashaka Cement and ETI.
Analysts noted that “Given the uptrend witnessed in the Benchmark index towards the tail end of 2016, yesterday’s negative close can be linked to profit-taking in counters which had previously appreciated. We expect sentiment to remain weak in the interim as equities work off the breath-taking rally of the previous month.”
Market breadth closed negative with 14 gainers and 17 losers. Vitafoam led the gainers table by 4.96 per cent to close at N2.54 per share. Livestock followed with a gain of 4.76 per cent to close at 88 kobo, while UAC Property rose by 4.73 per cent to close at N2.88 per share.
Also, African Prudential went up by 3.09 per cent to close at N3 and United Capital appreciated by 2.85 per cent to close at N2.89 per share.
On the other hand, Ashaka Cement led the laggards’ table by 4.91 per cent to close at N11.43 per share. Guaranty Trust Bank trailed with a loss of 4.58 per cent to close at N22.90, while Diamond Bank declined by 4.44 per cent to close at 86 kobo per share.
CCNN declined by 4.21 per cent to close at N4.55, while Oando shed by 3.80 per cent to close at N4.30 per share. Total volume traded went down to 166.09 million shares, valued at N868.57 million, and exchanged in 2,149 deals. Transactions in the shares of Unity Kapital topped the activity chart with 435.96 million shares valued at N335.69 million.
Omoluwabi Savings and Loans followed with 104 million shares worth N83.3 million, while UBA traded 9.23 million shares valued at N41.67 million. United Capital traded 6.71 million shares worth N19.43 and Guaranty Trust Bank transacted 5.21 million shares valued at N120.62 million.

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BusinessLeadership

Electrical energy Era Hits three,959 MW

The Transmission Company of Nigeria (TCN) yesterday disclosed that it wheeled out about 3,959 megawatts of generated electricity to the 11 distribution companies operating in the country as Nigeria’s power supply gradually stabilized.
This was contained in the power generation data obtained from daily forecast on the Nigerian Electricity System Operator (SO) website. The daily power statistics posted by SO, a section of the TCN, shows that power generation gradually improved during the festive season with a peak generation of 3,959 megawatts from the national grid.
The website shows that the country’s power generation also recorded its lowest generation of 3,366 megawatts within the same period. According to the Nigerian Electricity Supply Industry (NESI), operational report for January 3, the power sector hits a peak generation of 4,959 megawatts as against 3,321 megawatts recorded on December 2, 2016.
NESI, a subsidiary of the TCN, said that the sector recorded highest system frequency of 51.52Hz and lowest system frequency of 48.85 Hz. It also said that the highest voltage recorded was 372KV, while lowest voltage recorded on the same day was 300KV.
Meanwhile, NESI, on January 3, 2017 disclosed that over N534 billion of revenue was lost by the power sector in 2016. Among the reasons for the loss are shortages in gas supply, frequency and line limitations and water levels management constraints that led to several cases of electricity outage in the country.
NESI, which put the average daily revenue loss at N1.5 billion, said gas constraint remained one of the major challenges facing the electricity sector. It explained that the N534 billion amounts to the value of electricity lost on account of the challenges, part of which could have been used to bridge the liquidity gap in the power sector, estimated at N1trillion.
Already, the sector is finding it difficult to access more loans from Nigerian banks due to their inability to meet the payment obligations for previous debts.
The situation will also affect the capacity of the power firms to improve on electricity supply to consumers for domestic and industrial uses. NESI said in its daily statistics on energy losses that the industry lost N1.525 billion on December 24, 2016 alone.
It also disclosed that about 12 power stations could not produce electricity during off-peak period under the review. Statistics from the National Control Centre, Osogbo, showed that Afam IV-V, Geregu Gas, Alaoji National Integrated Power Project (NIPP) and Olorunsogo Gas plants could not produce a single megawatt (MW) on December 25, 2016.

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