29 Jul

Daily Watch – Banks pass interest rate hike on, Shell production plunges

  • Deposit Money Banks have begun an upward review of the interest rates on all outstanding loans. Following Tuesday’s increase of the Monetary Policy Rate from 12 percent to 14 percent by the CBN’s Monetary Policy Committee, the Punch quoted multiple sources as saying that the lenders would, as early as next week, begin to dispatch letters to their customers, informing them of the upward review of the interest rates on their loans. They said the upward reviews of the rates were being done with keen consideration for certain conditions relating to each bank customer. Officials said the latest review by the banks might move the interest rate on some loans from between 25 per cent and 27 per cent to around 30 per cent.
  • Electricity generation firms have put the debts owed them by Nigeria Bulk Electricity Trading and others at over ₦140 billion. In a report, the GenCos said, “The verified amounts invoiced by the Gencos are required to be guaranteed and paid by the NBET. The trend of payment from the NBET to the Gencos has been very poor.” The Gencos said from the pre-transitional stage of the electricity market till date, the outstanding payments being carried in their books had consistently been on the increase. The amounts owed to Egbin Power, Transcorp Ughelli Power, Shiroro Power Station, Geregu Power, Kainji/Jebba power stations and Sapele Power were put at ₦68.71 billion, ₦28.29 billion, ₦9.66 billion, ₦7.98 billion, ₦20.94 billion and ₦9.9 billion respectively. The power firms said they had not received full disbursement of the intervention fund from the CBN, and that there was absolutely no clarity as to when the remaining payment tranche would be completed.
  • Shell has announced that its liquids production available for sale in Nigeria plunged by 41 percent in the second quarter of this year. The oil major’s liquids production available for sale in Nigeria was put at 37,000 barrels per day in the second quarter of this year, down from 63,000 bpd in the same period of 2015. Total production by SPDC stood at 128,000 barrels of oil equivalent per day, down from 163,000 boepd in the same quarter of last year. Currently, Forcados, Qua Iboe and Brass River crude oil grades are under force majeure, while Escravos and Bonny Light are facing significant loading delays. This month, Shell shut the Trans Niger pipeline, which is one of the pipelines that carry crude to the Bonny Light Export Terminal, following a leak in Ogoniland.
  • Star Auto Industries has opened a new factory to produce brake pads and linings. Located at Navy Town, Lagos, the factory will manufacture brake pads and linings. MD, Ngozi Ukachukwu, said the company is currently partnering with some educational institutions and the government for research and testing. According to her, this includes research in local resin production and replacement of certain materials with local alternatives extracted from palm kernels. The aim is to reduce the company’s imported raw materials component to 20% over the next two years.