Nigeria’ll stop oil imports in 2014, says Aganga

IN three years, Nigeria will stop importing petroleum products, Finance Minister Olusegun Aganga said yesterday.

Also to stop is the importation of rice and some other commodities. The measures are to grow the economy, according to the Minister, who spoke in Lagos during an interactive session with The Organised Private Sector, hosted by the Debt Management Office.

He disclosed that the government had saved N12 billion from Ministries, Departments and Agencies (MDAs), as it renews interest in fiscal discipline in public finances.

The government is discussing with three investors, who are billed  to set up refineries in the country.

Nigeria, which is the world’s seventh largest producer of crude oil,  and  in spite of the fact that she has four oil refineries, imports  about 70 per cent of  its refined petroleum products. The refineries, which have the capacity to process 445,000 barrels of crude a day,  are running at about 30 percent of installed capacity. All four refineries are undergoing routine maintenance.

About N700billion is spent on petroleum subsidy annually.

Aganga said Nigeria would save a lot of money, if it produces petroleum products locally.

“We want make sure that in the next three years, all these areas that we are wasting our foreign reserves on will be stopped. Rice is another area that government is working to stop importation. Government is committed to providing the right environment for these industries to thrive,” he said.

In his view, the government will save a lot by using gas to produce fertiliser and cultivating over 58 million hectares to produce enough food for export and the local population.

“It is time for all of us to take advantage of all these things we have in the country, even as government’s Import Substitution Programme is going to address these issues,” Aganga said.

He promised that the government would provide incentives and waivers, where they become necessary, to ensure that the target is achieved.

According to Aganga, the government has no reason to continue the importation of fertiliser, rice, palm oil and petrol. He said talks were on with companies that want to set up fertiliser plants in the country.

“This government is determined that in three to four years time, we would have replaced these products. We have identified all the products and will create the environment that is conducive for them to thrive and make sure that we become exporters in these areas,” he said.

Aganga said a new payroll system introduced by the government saved  N12billion after the accounts of 16 MDAs were examined.

“We introduced IPS into our payroll system, where we have a bio-data of everybody in 16 MDAs and that has saved us $12 billion. We are now extending it to all the other MDAs. That tells you there is hope for significant savings in that area. That is part of the fiscal discipline approach, we are adopting,” he said.

The minister said the government has set up a committee looking at uncompleted projects to ensure that due process is followed and contracts completed.

“For the first time, we have a programme manager who will work with all the MDAs, from where they are doing procurement to where they are doing designs, implementation. They follow that process and report back to the Budget Office. Procurement, monitoring and evaluation are followed strictly by these bodies,” he said.

Aganga also said the government was designing a platform that will make it easier for each constituency to know the roads or any developmental projects that are being awarded, and when such projects will be completed. This  he said, will make the people hold government accountable and create transparency in the execution of contracts.

He said that training of government personnel abroad will henceforth be scrutinised and tied to productivity. 

He said that there is nothing wrong with the establishment of the  Sovereign Wealth Fund (SWF) provided that the funds in the Excess Crude Account (ECA) are used prudently by benefiting governments and parastatals.

The Minister also disclosed that government has received 331 proposals, in terms of expression of interest in power projects. The Bureau of Public Enterprises (BPE) and their advisers, he said,  are working to get the best investors for the power projects.

Aganga said the government has identified 65 projects needed to transform the economy. “Modern rail system is being proposed. We have also identified, which of them will be funded through Public Private Partnership and that’s why government has set out N15 billion tagged viability gap funding in the budget to help support companies that will be carrying out these projects, especially the unprofitable ones,” he said.

Government  he said, needs to bring down domestic debt, which is usually tied to recurrent expenditure while foreign debts are used in developmental projects.

DMO Director-general Dr. Abraham Nwankwo said the government was partnering with the private sector to ensure that government’s plan to bring Nigeria into the top 20 economies in the year 2020 is achieved.

http://www.thenigeriandaily.com/2011/03/29/nigeria%E2%80%99ll-stop-oil-imports-in-2014-says-aganga/

China and Russia impose export restrictions on petrol

By Javier Blas in London

Published: May 10 2011 18:33 | Last updated: May 10 2011 18:33

China and Russia have introduced export restrictions on petrol as local prices surge and consumers protest, a sign that emerging countries are spreading the use of beggar-thy-neighbour policies from food commodities to energy.

The measures, announced over the past few days, come as inflation becomes a problem in emerging countries, forcing central banks to tighten monetary policy to cool their economies.


Moscow has raised a petrol export duty by a hefty 44 per cent this month, in what amounts to the imposition of a prohibitive tax on overseas sales. The measure will tighten fuel supplies in the Baltic and central Asia.

Vladimir Putin, prime minister, has criticised Russia’s oil groups, accusing them of rationing supplies to keep prices high. “There is no deficit. This is not an issue of a deficit. The issue is collusion,” he said. “[The oil groups] have agreed among themselves to put just a small quantity on the market.”

At the same time, Beijing has put strong pressure on its state-owned companies to halt overseas sales of petrol. Sinopec, Asia’s largest refiner by capacity, has announced that it will not export more than small amounts in May to Hong Kong and Macao.

“Though exporting oil products makes good profits, we have suspended exports,” the company said.

China and Russia have used export restrictions in the past as an an anti-inflation tool in the agricultural sector. Moscow restricted grain sales in 2008 during the global food crisis through the use of export duties and quotas and imposed a total export ban in August 2010 after a drought destroyed its crop. The export ban remains in place.

Beijing imposed an export ban on rice in 2008 after the cost of it surged to an all-time high on the international market.

Commodity analysts and traders blame the export restrictions for exacerbating the 2007-08 food crisis that triggered panic buying among importers.

Moreover, analysts and traders said that the export restrictions in China and Russia would depress local fuel prices, stopping price signals from helping to slow demand growth and deterring refiners from investing in new capacity.


http://www.ft.com/cms/s/0/7eac6bb0-7b29-11e0-9b06-00144feabdc0.html#axzz1MRFVdr00

Obama plans to increase domestic oil production

  Washington, May 14:  The US President, Mr Barack Obama, has announced plans to expand domestic oil production and speed up the evaluation of oil and gas resources in the country as part of his long-term plan to reduce US’ reliance on foreign oil.

In his weekly address to the nation, Mr Obama said he has directed the Department of the Interior to conduct annual lease sales in Alaska’s National Petroleum Reserve, one of the potential areas for oil.

He asked the authorities to give companies more time to meet higher safety standards for exploration and drilling. The administration is extending drilling leases in areas of the Gulf of Mexico that were impacted by the temporary moratorium, as well as certain leases off the coast of Alaska.

Mr Obama said he is establishing a new inter-agency working group to ensure that Arctic development projects meet health, safety and environmental standards.

In the past few months, rising gas prices have put an added strain on American families.

“Without a doubt, one of the biggest burdens over the last few months has been the price of gasoline. In many places, gas is now more than $4 a gallon, meaning that you could be paying more than $60 to fill up your tank,” the President said.

“These spikes in gas prices are often temporary, and while there are no quick fixes to the problem, there are a few steps we should take that make good sense,” he said.

“We should increase safe and responsible oil production here at home. Last year, America’s oil production reached its highest level since 2003,” he said, adding he believes that the US should expand oil production in America — even as we increase safety and environmental standards.

“The third step we should take is to eliminate the tax payer subsidies we give to oil and gas companies. In the last few months, the biggest oil companies made about $4 billion in profits each week. And yet, they get $4 billion in taxpayer subsidies each year.

“This isn’t fair, it makes no sense. Before I was President, the CEOs of these companies even admitted that the tax subsidies made no sense.

Well, next week, there is a vote in Congress to end these oil company giveaways once and for all. And I hope Democrats and Republicans come together and get this done,” Mr Obama said.


http://www.thehindubusinessline.com/industry-and-economy/economy/article2018857.ece

Funny, Hopefully, Nigeria dnt come home crying,

The 'Game' changes daily.

Think GEJ and Co need base their strategies on those of the opponents. The West/China are making some cunning moves.

Nigeria imports petrol and so if the price of petroleum increases then so will inflation unless domestic fuel subsidies also increase.

At the same time in recent weeks the price of Crude Oil has fallen. This has been attributed to oil speculators.

And I think Obama's announcement will take effect in the market next week. The possible outcome will be another fall in Crude Oil prices which will not be beneficial to Nigeria.

There's alot going on in the Energy/Commodities market right now.

For GEJ /NIGERIA the time is now no matter whose ox is gored. Ppmc needs to be properly dealt with cos they are fond of hoarding to create artificial scarcity and subsidies should be removed to drive competition. I hope the federal govt is serious and committed to these new policies cos theres too much importation which has crippled economic development for too long.