Economy
Why We Owe FG N23.4b Export Fees—NNPC
By Modupe Gbadeyanka
The Nigerian National Petroleum Corporation (NNPC) has explained why it owes about N23.4 billion in respect of Nigerian Export Supervision Scheme (NESS) fees chargeable on crude oil and gas exports since 2008.
NESS fees are payments due to Pre-shipment Inspection Agents and Monitoring and Evaluation Agents in respect of their supervision of crude oil and gas exports, culminating in generation of Clean Certificate of Inspections (CCI) to an exporter as permit to execute action.
As usual, at the end of each reconciliation, agreed NESS fees payable are signed off by stakeholders.
Speaking in Abuja on Monday February 20, 20017 before the Senate Joint Committee of Finance; Trade and Investment; Gas; Petroleum Upstream; Banking, Insurance and other Financial Institutions; Judiciary, Human Rights and Legal Matters; and Customs and Excise, NNPC GMD, Dr Maikanti Baru, said NNPC accumulated the sum due to budgetary appropriation constraints imposed on it by the National Assembly.
Dr Baru, who was represented by the Managing Director, NNPC Capital, Mr Godwin Okonkwo, at the one-day investigative public hearing on the Pre-Shipment Inspection of Export Activities in Nigeria at the National Assembly Complex in Abuja, stated that the National Assembly had always budgeted N20 million for NESS Fees, adding that NNPC lacked any legal right to remit any amount above the appropriated sum once it was exhausted.
Dr Baru stated that NNPC was normally charged 0.15 percent Free On Board (FOB) value of export as NESS fees for the Corporation’s execution of export of crude oil and gas on behalf of the Federal Government.
The GMD said: “NESS budget is appropriated in the yearly National budget. NNPC-NAPIMS (National Petroleum Investment and Management Services) administers the budget and payments under the scheme. Crude Oil Marketing Division (COMD) provides the lifting profiles and the actual price to compute the FOB export value.”
Declaring the public hearing open, the Senate President, Mr Bukola Saraki, who was represented by the Senate Majority Leader, Mr Ahmed Lawan, said the 8th Senate was committed to taking steps that would promote transparency and accountability of all public and private institutions that transact business with or on behalf of the Federal Government.
He noted that Nigeria was facing a lot of challenges and if the country was good for business, then the laws of the Land must be obeyed, stressing that the Senate was in a hurry to move the country forward through legislation.
“This is an opportunity to open the books of Ministries, Departments and Agencies (MDAs) to right the wrong of the past”, the Senate President affirmed.
On his part, the Joint Committee Chairman, Mr John Enoh, noted that the investigative public hearing was to instil probity and transparency in the process of crude oil and gas exports in order to reduce leakages.
He said that Section 11 of the Pre-shipment Inspection of Export Act made provision for repatriation of proceeds after 90 days, however, most exporters of crude oil and gas contravened the provision.
Mr Enoh urged all stakeholders to make meaningful contributions towards the realization of the objectives of the Joint Senate Committee, noting that any submission targeted at misleading the Committee would be sanctioned.
The Federal Government enacted the Pre-shipment Inspection of Export Act No. 10 of 1996 to ensure the exportation of quality goods through inspection of all export products which gave rise to the Nigerian Export Supervision Scheme (NESS). Its responsibility was extended to cover crude oil and gas exports in 2008.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.16 per cent decline on Tuesday, January 21, extending its loss this week to two.
This further depleted the market capitalisation of the alternative stock exchange by N1.65 billion at the close of transactions to N1.071 trillion from the N1.073 trillion it closed in the preceding session.
In the same vein, the NASD Unlisted Security Index (NSI) slid by 4.79 points to wrap the session at 3,100.33 points compared with 3,105.12 points recorded in the previous session.
The bourse ended with two price losers yesterday led by Geo Fluids Plc, which gave up 32 Kobo to trade at N4.38 per share versus Monday’s closing price of N4.70 per share and FrieslandCampina Wamco Nigeria Plc, which depreciated by 15 Kobo to close at N39.50 per unit compared with the previous day’s N39.65 per unit.
On the second trading day of the week, the number of deal carried out slightly went up by 8.3 per cent to 13 deals from the 12 deals executed at the previous trading session.
Also, the value of transactions increased by 97.2 per cent to N4.5 million from the N2.5 million recorded a day earlier, while the volume of securities traded in the session declined by 71.6 per cent to 183,780 units from the 767,610 units recorded on Monday.
FrieslandCampina Wamco Nigeria Plc remained the most traded equity by value (year-to-date) with 4.1 million units worth N162.9 million, followed by Geo-Fluids Plc with 9.1 million units valued at N44.0 million, and 11 Plc with 55,358 sold for N14.5 million.
Also, Industrial and General Insurance (IGI) Plc closed the day as the most active stock by volume (year-to-date) with 25.3 million units worth N5.9 million, trailed by Geo-Fluids Plc with 9.1 million units sold for N44.0 million, and FrieslandCampina Wamco Nigeria Plc with 4.1 million units valued at N162.9 million.
By Adedapo Adesanya
Pressure further mounted on the Nigerian Naira in the different segments of the foreign exchange market on Tuesday, making its value to shrink against the United States Dollar at the close of business.
In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency crashed against its American counterpart during the session by 0.18 per cent or N2.73 to settle at N1,552.78/$1, in contrast to Monday’s closing price of N1,550.05/1.
But against the Pound Sterling and the Euro, the local currency traded flat in the official market yesterday at N1,906.98/£1 and N1,613.48/€1, respectively.
As for the black market segment, the Naira weakened against the Dollar on Tuesday by N5 to sell for N1,670/$1 compared with the preceding day’s value of N1,665/$1.
Meanwhile, the cryptocurrency market heaved a sigh of relief during the session as President Donald Trump created a crypto task force dedicated to “developing a comprehensive and clear regulatory framework for crypto assets.”
The task force will be led by Commissioner Hester Peirce, a long-time advocate for the crypto industry, and will work closely with the crypto industry to develop regulations. This is after Mr Gary Gensler, an opponent of crypto, officially stepped down as chairman of the US Securities and Exchange Commission (SEC) after Mr Trump’s term started.
The task force will also work with Congress, providing “technical assistance” as it crafts crypto regulations.
Solana (SOL) recorded a 9.2 per cent growth to sell at $257.09, Dogecoin (DOGE) rose by 7.6 per cent to $0.36789, Ripple (XRP) added 4.0 per cent to finish at $3.18, and Bitcoin (BTC) increased by 3.7 per cent to $105,515.03.
Further, Binance Coin (BNB) appreciated by 2.8 per cent to close at $699.01, Cardano jumped by 2.1 per cent to trade at $0.9972, Ethereum (ETH) soared by 2.0 per cent to settle at $3,308.21, and Litecoin (LTC) went up by 1.5 per cent to end at $116.72, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
The price of the Brent crude oil grade went below the $80 mark on Tuesday after it shed 86 cents or 1.1 per cent to trade at $79.29 per barrel after the US President, Mr Donald Trump, signaled the possibility of his country boosting its oil production.
This move raised concerns of higher US output in a market widely expected to be oversupplied this year, with the US West Texas Intermediate (WTI) crude futures falling by $1.99 or 2.6 per cent during the session to $75.89 per barrel.
On his first day in office, the US President signed an executive order to unleash America’s energy by easing the barriers to oil and gas extraction and production and revoking a series of climate orders by former President Joe Biden.
As pledged in the campaign, the executive order follows the declaration of a national energy emergency.
The declaration includes measures to expedite energy infrastructure delivery, and emergency approvals by agencies “to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources, including, but not limited to, on Federal lands.”
This will likely confirm expectations that the oil market will be oversupplied this year after weak economic activity and energy transition efforts weighed heavily on demand in top-consuming nations the US and China.
President Trump also said he was considering imposing 25 per cent tariffs on imports from Canada and Mexico from February 1, rather than on his first day in office as promised.
The delay helped ease concerns of an immediate tightening of the market among US refiners, many of which are geared to process the type of crude oil supplied by these countries.
The US Energy Information Administration (EIA) reiterated on Tuesday its expectations for oil prices to decline both this year and next.
On its part, the Organisation of the Petroleum Exporting Countries (OPEC) projects robust demand growth in the world both this year and next.
In 2025, OPEC says demand is set to grow by 1.4 million barrels per day leaving its projection unchanged from the December report.
However, losses were also limited after the US president said his administration would “probably” stop buying oil from Venezuela. The U.S. is the second-biggest buyer of Venezuelan oil after China.
Also weighing on prices on Tuesday was the potential end to the shipping disruption in the Red Sea.
Yemen’s Houthis said on Monday they will limit their attacks on commercial vessels to Israel-linked ships provided the Gaza ceasefire is fully implemented.
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