Business
Updated: Dangote refinery to begin petrol supply Sunday, signs agreement with NNPCL
Updated: Dangote refinery to begin petrol supply Sunday, signs agreement with NNPCL
Relief may have finally come to ease the nationwide fuel scarcity as the Dangote Refinery will on Sunday September 15 start distributing petrol.
This follows an agreement the new refinery just signed with the Nigerian National Petroleum Company Limited (NNPCL).
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, disclosed this on Friday the Executive Chairman of the Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji.
This was said during a press conference in Abuja where Adedeji represented the minister.
“I am pleased to confirm that all necessary agreements have been finalized, and the loading of the first batch of the PMS (premium motor spirit – petrol) from the Dangote Refinery will begin on Sunday, September 15,” Edun stated.
From October 1, the NNPC Ltd. will provide the Dangote Refinery with approximately 385,000 barrels per day of crude oil, which will be paid for in Naira. In exchange, the refinery will supply petrol and diesel of equivalent value to the domestic market, also to be transacted in Naira.
“Diesel will be available for sale in Naira to any interested buyer, while PMS will be sold exclusively to the NNPC for distribution to other marketers for the time being,” he added.
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All regulatory costs associated with the distribution, including those from the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA), will also be settled in Naira, according to the minister.
To ensure a smooth implementation of this initiative, a one-stop shop will be established at the Nigerian Ports Authority in Lagos, coordinating service provision from all regulatory and security agencies. Furthermore, the technical committee responsible for developing this initiative will transition to an implementation and monitoring committee based in Lagos for the next three to six months.
Edun reminded that the Federal Executive Council (FEC), under President Bola Tinubu’s leadership, had previously approved the sale of crude oil to local refineries in Naira.
This is aimed at reducing the pressure on the Naira, eliminating unnecessary transaction costs, and improving the availability of petroleum products within the country.
The minister acknowledged the efforts of the committees involved in this project, highlighting their work with the NNPC and Dangote Refinery to finalize the details for implementing the FEC’s approval.
“We sincerely thank President Tinubu for championing this innovative initiative and assure him of our commitment to fulfilling his vision,” he said.
Dangote refinery to begin fuel supply Sunday after deal with NNPCL
Business
Fresh trouble over supply volume in Dangote refinery petrol
Fresh trouble over supply volume in Dangote refinery petrol
LAGOS — More controversy has emerged in the execution of a sale-purchase deal on premium motor spirit, otherwise known as petrol, between the Nigerian National Petroleum Company Limited, NNPCL, and Dangote Refinery.
NNPCL last weekend said Dangote could only deliver 16.8 million litres out of the 25 million litres it initially agreed with NNPC.
A source at the NNPCL also told Vanguard, yesterday that the refinery is struggling to deliver the 16.8 million litres it promised.
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But with the latest delivery figure it disclosed, Dangote must have significantly surpassed its promised delivery as well as the national demand put at over 40 million litres per day.
This also means that Dangote can make further petrol importation unnecessary.
But against the backdrop of this latest development, Vanguard learned that importation by NNPCL may have intensified with several consignments, totalling over 135 million litres, within three weeks from September 27, 2024, with the latest import arriving Friday.
This also implies a sudden excess supply of petrol barely a few days after the country was suffocated by acute shortage of the product, resulting in a sharp rise in the price.
Speaking to Vanguard on the development, the Group Chief Branding and Communications Officer of Dangote Refinery, Anthony Chiejina, stated: “We have already loaded 111 million litres of petrol and the exercise is ongoing.
“We are refining and have no reason not to load. So, loading is ongoing and we would continue to provide the product to the market.”
Fresh trouble over supply volume in Dangote refinery petrol
Business
$900m FG bond: United Capital leads with 180% subscription
$900m FG bond: United Capital leads with 180% subscription
United Capital Group has successfully led the issuance of Nigeria’s first-ever Domestic FGN US Dollar Bond, securing more than $900 million in funding with over 180 per cent subscription. The bond program, with a 9.75 per cent yield, attracted significant interest from local and international investors, including Nigerians in the diaspora, institutional investors, and non-resident Nigerians, highlighting confidence in Nigeria’s economic growth potential and financial markets.
The bond will be listed on the Nigerian Exchange Limited (NGX) and FMDQ Securities Exchange and proceeds from the issuance will be used to fund key infrastructure projects in critical sectors of the economy.
Commenting on the achievement, Chief Executive Officer of United Capital Group, Peter Ashade, said, “The successful issuance of Nigeria’s inaugural Domestic FGN US Dollar bond is a significant milestone for both the country and United Capital. This transaction aligns perfectly with our vision of transforming the African financial landscape. By providing access to innovative investment opportunities, we are empowering investors and contributing to Nigeria’s economic growth.”
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On his part, the Managing Director of Investment Banking at United Capital Gbadebo Adenrele, described the transaction as a “landmark moment for Nigeria’s capital market.” He added, “As a pioneer in this class of transactions, United Capital has laid the foundation for more significant capital raises by the Nigerian Government, other African sovereigns, and major corporate issuers.”
United Capital was the Lead Issuing House and Coordinator for the transaction, with Africa Finance Corporation serving as the Global Coordinator. Other firms involved include Meristem Capital, Stanbic IBTC Capital, Vetiva Advisory, and several other financial institutions and legal advisers.
This bond issuance reinforces United Capital’s position as a leading player in Africa’s financial markets, following recent successes like the listing of Transcorp Power on the Nigerian Exchange Limited and the issuance of Sierra Leone’s first local currency corporate bond.
$900m FG bond: United Capital leads with 180% subscription
Business
Naira loses N100 to US dollar at official market
Naira loses N100 to US dollar at official market
The Naira lost more than N100 against the U.S. dollar at the official window, despite a slower headline inflation rate in August.
Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) highlighted that the local currency was sold at N1,656/$1, higher than the N1,546/$1 recorded on Monday.
However, in the parallel market, the Naira appreciated by N5, trading at N1,660/$1 compared to the previous rate of N1,665/$1.
This marks the second consecutive month of lower headline inflation, attributed to reduced food prices during the harvest season.
According to the Nigerian Bureau of Statistics (NBS), headline inflation for August was 32.15%, down from 33.40% in July. Food inflation also decelerated, reaching 37.52% compared to 39.53% in July 2024.
U.S. Dollar Index Gains Momentum Ahead of Fed Meeting
On Tuesday, the U.S. dollar appreciated against most currencies, including the Naira, as higher-than-expected U.S. retail sales data was released, raising the possibility of a less aggressive Federal Reserve.
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The U.S. Dollar Index, which tracks the dollar against a basket of six currencies, showed a slight increase, recovering from earlier lows this year. While some market pricing suggests a 50-basis point rate cut, most analysts predict a more modest 25-basis point cut.
The U.S. labor market continues to strengthen, suggesting that further relaxation of monetary policy could support economic growth. However, this high optimism may indicate that the Federal Reserve might continue raising interest rates, albeit at a slower pace.
The U.S. Commerce Department reported a modest 0.1% rise in retail sales in August, fueling hopes that the economy has stabilized through much of the third quarter.
Investors are now awaiting the Federal Reserve’s decision on interest rates, expected at the conclusion of its policy meeting later today. The last time the Fed cut rates was in response to the COVID-19 pandemic in March 2020.
While Nigeria is expected to see foreign capital inflows later in the year, it is unlikely the Federal Reserve will make aggressive rate cuts, given the current market conditions.
The dollar index, which measures the dollar against major currencies like the yen and euro, increased by 0.199% to 100.90 on Tuesday.
Fed funds futures currently reflect a 63% chance of a 50-basis point rate cut, up from 30% a week ago, while the likelihood of a 25-basis point cut is at 37%. These probabilities have shifted after reports reignited discussions of potential aggressive easing measures.
Other U.S. economic data released on Wednesday suggest that the Federal Reserve may find it challenging to implement aggressive rate cuts. U.S. business inventories increased by 0.3% in July, and factory production rebounded in August.
Present fundamentals indicate that the market is already pricing in some rate cuts over the next several months, though some analysts warn that the market may be moving ahead of itself.
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