23 Oct

Daily Watch – No change in oil sector, Import tariff may be reviewed

  • Vice President Osinbajo says the Federal Government is not currently planning to sell the nation’s four refineries or part of its stakes in joint venture assets in the oil and gas sector. The Group Managing Director, Nigerian National Petroleum Corporation, Dr. Ibe Kachikwu, was however recently reported to have said that any of the refineries that failed to work optimally at the expiration of a 90-day ultimatum would be sold. “At the moment, we are not considering any of those”, Osinbajo said. Of course, they are options that are always there. But we think that we are able to resolve some of the cash call difficulties that we have experienced in past years. “We think that some of what is taking place – the incorporation of the JVs and the JV partners being able to simply borrow, even on behalf of the Federal Government – I mean, able to introduce their own capital into it. These are just ways that we can raise our own portion of contributions to the joint ventures. “It will only be a last resort to sell down government’s stakes in the joint ventures and we don’t think we have come anywhere near that.”
  • The federal government may be looking to review downward the present import tariff on vehicles. The review may however not lead to outright cancellation of the auto policy, which was announced in September 2013, but the current 70 per cent tariff on imported cars may be slashed as a way to force down the prices of vehicles. The expectation is for this move to reduce the cost of new vehicles and increase the tempo of business in the nation’s automotive sector. The imminent review follows complaints over the implementation of the auto policy by the government in the last five years. Car prices were increased last year by about 60 per cent shortly after the import tariff went up from 22 per cent to 70 per cent, a situation, which made it difficult for many to buy new cars, just as fleet buyers such as corporate firms have had to cut down on the number of vehicles purchased.
  • MTN, is cutting its full-year forecast for subscriber numbers after more than five million Nigerian customers were disconnected following a review into how they were able to register for phone contracts. The company will add 14.8 million net subscribers this year, compared with a previous forecast of 16.75 million, Johannesburg-based MTN said in a statement yesterday. The carrier’s customer base grew 0.9 per cent to 233 million in the three months through September compared with the previous quarter.