Warri & Kaduna refineries shut; How crash in oil prices tears OPEC apart; Senate adopts corrected version of Buhari’s 2016 budget; Nigeria loses N650b to NLNG tax holiday . . .
Warri & Kaduna refineries shut
AS a fallout of the attack on some oil and gas pipelines in Gbaramatu area of Delta State by suspected militants at the weekend, the Nigerian National Petroleum Corporation (NNPC) has shut down the Kaduna and Warri refineries.
The development threatens government’s efforts at reducing fuel importation at a time when the local refining seems to be gaining momentum.
Besides, President Muhammadu Buhari has vowed that his administration would tackle resurgent militancy, oil theft and vandalism of oil pipelines and other forms of insecurity in the Niger Delta region.
The Group General Manager, Group Public Affairs Division, NNPC, Ohi Alegbe, yesterday confirmed that the company has shut down crude oil flows to the two pipelines due to the recent attacks on the facilities. “We have shut down flows for now, the military are on top of the matter,” he said, without offering details of the attacks.
Crash in oil prices tears OPEC apart
The Organisation of Petroleum Exporting Countries (OPEC) is tutoring on the heels of persistent crude oil price drops lately. The oil cartel may have divided into factions as the interest of the 13-member cartel is jolted by falling oil prices in the international market.
The seemingly uncontrollable fall in oil prices has largely affected the economic status of some members, including Nigeria since 2014, but the test of strength within OPEC appears to have overshadowed the need for urgent and strategic decision that could reduce the tension.
Oil prices have fallen by more than 70 per cent over the last 18 months, mainly as a result of oversupply. The cartel, in a policy championed by Saudi Arabia, had decided to keep production unchanged to avoid domination of the emerging shale oil. Now the prices have slid to critical level.
Benchmark Brent crude futures slipped yesterday below $28 a barrel to a 12-year low, while the OPEC basket was $25 per barrel.
Senate adopts corrected version of Buhari’s 2016 budget
The Nigerian Red Chamber, The Senate, has unanimously adopted a corrected version of the proposed budget (2016 fiscal plan) sent to it by President Muhammadu Buhari yesterday.
It also resolved to begin work on the budget today even as the upper legislative chamber declared that it had taken Buhari’s corrected version as the substantive budget proposal.
Shortly after the plenary session commenced, the Senate President, Abubakar Bukola Saraki, read Buhari’s official communication to the upper chamber, a copy of which he also sent to the House of Representatives, in which he lamented that errors in the budget document were not corrected before the presentation to the joint session of the National Assembly in December.
In the House of Representatives, a deft handling of the matter by Speaker Yakubu Dogara helped to make short-lived a disagreement at the commencement of plenary yesterday.
The letter tagged “2016 Budget Proposals,” which acknowledged the confusion that had been generated by efforts to ensure that there were no errors in the document, however, attracted some criticisms from senators because of the error in dates as the president, in the first line of the letter wrote 2016 when it should have been 2015.
Nigeria loses N650b to NLNG tax holiday
Tax incentives by the Federal Government to the Nigeria Liquefied Natural Gas (NLNG) Limited has deprived the nation of about $3.3billion or N650 billion at an exchange rate of N197 to the dollar from 1999 when it began operations, according to a report.
The Nigeria LNG is a joint venture project by the Nigerian National Petroleum Corporation (NNPC) in partnership with Royal Dutch Shell (25.6 per cent), Total (15 percent), and ENI (10.4 per cent).
The consortium was established in 1989 to help Nigeria harness and exploit her huge reserves of natural gas resources for exports.
The report by ActionAid titled “Leaking Revenue-How a big tax break to European gas companies has cost Nigeria billions”, criticised the tax exemption arrangement, and extension arguing that even with a normal five-year tax holiday, the NLNG would still have been profitable.
Meanwhile, the NLNG has faulted the report, arguing that the tax arrangement was in line with the Nigerian constitutional provisions. The firm also said under the arrangement “the Nigerian government’s initial $2.5billion investment, bolstered by the associated tax incentives, has so far yielded over $33billion in the form of dividends, taxes and feed-gas purchases for the country over the last 16 years, with an estimated additional $5billion accruing through corporate spend on local goods and services during the same period.”