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Economy

FG Eyes More Oil Investment from Downstream Deregulation

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downstream deregulation

By Adedapo Adesanya

The federal government has said that the deregulation of the downstream oil sector will help to attract more investments into the country as the policy will free up trillions in naira.

This was disclosed by the Minister of State for Petroleum Resources, Mr Timipre Sylva, in a statement titled Deregulation: The Facts And The Reasons Behind The Policy released on Thursday.

The minister noted that the federal government had concluded that it was unrealistic to continue with the burden of subsidizing the commodity which costs trillions of Naira every year, especially since the subsidy was benefiting the rich rather than the poor and ordinary Nigerians.

He said, “It has become expedient for the Ministry of Petroleum to explain misconceptions around the issue of Petroleum Products Deregulation.

“After a thorough examination of the economics of subsidising PMS for domestic consumption, the government concluded that it was unrealistic to continue with the burden of subsidising PMS to the tune of trillions of naira every year.

“More so, when the subsidy was benefiting in large part the rich rather than the poor and ordinary Nigerians.

“Deregulation means that the Government will no longer continue to be the main supplier of Petroleum Products, but will encourage the private sector to take over the role of supplying Petroleum Products.”

The minister then said that following this line of action, market forces will henceforth determine the prices at the pump but noted that the government will continue to play its traditional role of regulation

This, it said, will be “to ensure that this strategic commodity is not priced arbitrarily by private sector suppliers; a regulatory function not unlike the role played by the Central Bank of Nigeria in the banking sector; ensuring that commercial banks do not charge arbitrary interest rates.”

“Petroleum Products are refined from Crude Oil. Therefore, the price of Crude (the feedstock) for the refining process will affect the price of the refined product,” he added.

Mr Sylva noted that when crude prices tanked, the government ensured that the benefits of lower prices were enjoyed by Nigerians by ensuring that PMS price was lowered.

He noted that government at that time indicated that an increase in prices would also reflect at the pump.

“We need to free up that investment space so that what happened in the Banking Sector, Aviation Sector and other Sectors can happen in the Midstream and Downstream Oil Sector.

“We can no longer avoid the inevitable and expect the impossible to continue. There was no time government promised to reduce Pump Price and keep it permanently low.

“Let us, therefore, ignore the antics of unscrupulous middlemen who would want status quo ante to remain at the expense of the generality of Nigerians,” he added.

The minister further said the government understood the likely impact higher petrol prices would have on Nigerians, and said it was working on solutions that will be beneficial to Nigerians.

“To alleviate this, we are working very hard to roll out the auto-gas scheme, which will provide Nigerians with alternative sources of fuel and at a lower cost,” he concluded.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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Economy

NGX Jumps 1.17% on Strong Investor Sentiment

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NGX 30 Index

By Dipo Olowookere

The upward movement witnessed at the Nigerian Exchange (NGX) Limited in the past trading session continued on Wednesday by 1.17 per cent.

The bullish momentum was buoyed by bargain-hunting in mid and large-cap shares on the platform amid renewed confidence in Nigerian equities.

Though the insurance counter closed lower by 0.04 per cent due to profit-taking, the gains by the others ensured that the domestic bourse remained in the green territory.

The industrial goods index appreciated by 2.11 per cent, the consumer goods sector surged by 1.44 per cent, the banking industry increased by 0.49 per cent, and the energy space rose by 0.20 per cent.

Consequently, the All-Share Index (ASI) went up by 1,272.64 points to 107,847.62 points from 106,574.98 points and the market capitalisation gained N794 billion to settle at N67.290 trillion compared with the previous day’s N66.496 trillion.

The volume and value of transactions as well as the number of deals decreased yesterday by 7.52 per cent, 15.25 per cent, and 1.19 per cent, respectively.

This was because investors bought and sold 442.6 million stocks worth N10.0 billion in 15,376 deals at midweek versus the 478.6 million stocks valued at N11.8 billion in 15,561 deals.

Sterling Holdings traded 49.6 million shares for N296.8 million, Ellah Lakes exchanged 34.5 million equities valued at N133.9 million, Zenith Bank transacted 25.6 million stocks worth N1.3 billion, Access Holdings sold 19.6 million shares valued at N553.7 million, and AIICO Insurance traded 18.5 million equities worth N32.2 million.

Business Post reports that Customs Street ended midweek with a positive market breadth index after 51 stocks closed in green and 16 stocks ended in red, indicating a strong investor sentiment.

VFD Group and Ikeja Hotel were the best-performing equities on Wednesday after chalking up 10.00 per cent each to sell for N52.80 and N14.85 apiece, Honeywell Flour gained 9.99 per cent to quote at N12.66, Transcorp Hotels also improved its value by 9.99 per cent to N126.10, and Eterna rose by 9.93 per cent to N48.70.

However, the worst-performing equity for the day was CWG with an 8.95 per cent loss to trade at N8.65, Regency Alliance slumped by 7.89 per cent to 70 Kobo, Lasaco Assurance tumbled by 7.25 per cent to N3.20, Royal Exchange plunged by 7.22 per cent to 90 Kobo, and SCOA Nigeria crashed by 6.54 per cent to N3.43.

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Economy

Controversial Tax Reform Bills Scale Second Reading at House of Reps

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tax reform bills

By Adedapo Adesanya

The four tax reform bills transmitted to the National Assembly last year by President Bola Tinubu have finally scaled second reading in the House of Representatives.

The bills, which have generated criticisms across the country, scaled the second reading on the floor of the Green Chamber on Wednesday, five months after the President transmitted them to the parliament for consideration following the recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms led by a tax expert, Mr Taiwo Oyedele.

The bills include the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.

They are gearing up for public hearing, which should be announced soon.

The four bills met minimal opposition in the Senate but faced a higher level scrutiny at the 360-member House of Reps as well as criticisms from northern statesmen, including governors and leaders.

During the midweek plenary, Mr Sada Soli feared that some sections of the new bills might contradict the 1999 constitution. According to the lawmaker, the issue of derivation must be clearly defined to avoid any ambiguity.

He was hopeful that the committee saddled with the responsibility to scrutinise the bills would address the issues that might arise before the bills are passed.

Other lawmakers also drew attention to the 40 acts which the bill sought to amend and requested they should be laid before the National Assembly.

The lawmakers said the issue of multiple taxation involving property purchase provided in the bill should be addressed, as the provision stated that the buyer and seller must pay tax.

In response, the Chairman of the tax reforms committee, Mr Oyedele, who has tirelessly defended the bills since they were presented, lauded the efforts of the lawmakers.

“We are grateful to the lawmakers for their robust debates and diligent consideration of the bills and look forward to continued engagement with the National Assembly and active participation in the public hearing process.

“May Nigeria win!,” he wrote.

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Economy

NASD Unlisted Security Index Slips 0.49%

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NASD Unlisted Security Index

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange fell by 0.49 per cent on Tuesday, February 11 as investors recalibrated their portfolios, selling off some securities they fell have yielded returns since they were acquired from the market.

This action by the market participants depleted the value of the trading platform by N8.86 billion during the trading session to N1.803 trillion from the N1.812 trillion it closed in the preceding session and the NASD Unlisted Security Index (NSI) went down by 15.65 points to settle at 3,184.02 points compared with 3,199.67 points recorded at the previous session.

UBN Property Plc declined by 17 Kobo to end at N2.05 per share compared with Monday’s closing price of N2.22 per share, Geo Fluids Plc decreased by 30 Kobo to N4.24 per unit from N4.54 per unit, Central Securities Clearing System (CSCS) Plc lost N1.50 to settle at N23.00 per share versus N24,50 per share, and FrieslandCampina Wamco Nigeria Plc crumbled by 12 Kobo to close at N39.98 per unit, in contrast to the preceding session’s N40.10 per unit.

Conversely, Air Liquide Plc appreciated by 41 Kobo to N8.33 per share from N7.92 per share and Afriland Properties Plc increased by 75 Kobo to sell for N18.65 per unit versus N17.90 per unit.

During the trading session, there was a 270.2 per cent rise in the volume of securities traded by investors to 1.9 million units from 502,112 units, the value of securities transacted grew by 223.4 per cent to N48.2 million from N14.9 million, and the number of deals went up by 63.2 per cent to 31 deals from 19 deals.

Impresit Bakolori Plc finished the day as the most active stock by value (year-to-date) with 519.5 million units worth N504.3 million, trailed by FrieslandCampina Wamco Nigeria Plc with 7.4 million units valued at N293.2 million, and Geo-Fluids Plc with 9.3 million units sold for N44.8 million.

Similarly, Impresit Bakolori Plc ended the session as the most active stock by volume (year-to-date) with 519.5 million units worth N504.3 million, followed by Industrial and General Insurance (IGI) Plc with 69.6 million units sold for N23.6 million, and Geo-Fluids Plc with 10.7 million units valued at N51.2 million.

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