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Nigeria loses N23bn to faulty Kaduna refinery’s lube unit

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The loss by Nigeria to the neglect of Kaduna refinery’s lube breaking unit has hit N23 billion. The neglect of the all-important section clocked 23 years at the weekend. The abandoned facility, New Telegraph gathered, has also worsened the prices of base oil importation into the country.

 

The Kaduna refinery is the only facility in Nigeria built with capacity to break base/lube oil-the major ingredient for the production of lubricants.

 

Checks by this newspaper showed that the base oil cracking unit of the refinery first showed signs of major mechanical faults in 1994, just two years after its inauguration, and has since been abandoned. This development has made Nigeria’s lubricant market to depend totally on importation of base oil from refineries abroad.

 

“The management of the refinery called the attention of the NNPC to this issue at that time,” a source at the Ministry of Petroleum Resources told New Telegraph, adding, “since then that unit has been left like that.”

 

With this development, Nigeria has lost over N23 billion to the abandonment of the facility. This is as a result of the over N1 billion annual loss to the importation of base oil, which is the major ingredient of lubricants manufacturing. Base oil, which forms 85 per cent of raw material for lubricants manufacturing, is one of the products of crude oil.

 

Nigeria, Africa’s biggest crude exporter, sells over one million barrels of crude daily to refineries abroad, swap about 445, 000 barrels daily for refined product and later buy and import base oil.

 

A document of the ministry of petroleum resources obtained by this newspaper at the weekend showed government’s decision to up attention for the base oil sub-sector but is silent on the abandoned lube cracking unit.

 

The importation of base is identified by the ministry as one of the challenges of the lube market, the document added. “Challenges facing lubricants market are unavailability of base oils locally and the resultant expensive import arising from skyrocketing exchange rates, high demurrage charges due to port delays and abandoned/ unlicensed lubricants blending plants nationwide,” the document read.

 

Many stakeholders in the lubricants subsector who are aware of this development have condemned the country’s dependence on importation of base oil. Executive Secretary, Lubricants Producers Association of Nigeria (LUPAN), Mr. Emeka Obidike, appealed to government to come to the aid of lubricants sub-sector.

 

Although Obidike turned down request to know the exact amount that the country is losing to importation of lube oil, he maintained that billions of naira could have been saved if the country was able to stop the importation. “It doesn’t make any sense for Nigeria to export crude and later buy lube oil, which is a product of the crude for shipment into the country’s lubricants market.

 

 

“Billions of naira could be saved if we develop capacity to address this act is,” he said. Principal Partner, Lubeservices Associates, Kayode Sote, an engineer, said the lubricants market had potential to promote Nigeria’s economic fortunes.

 

“Statistics confirmed that industrial lubes accounted for 63 per cent of the total world lube consumption, about 1532 million gallons valued at $7.6 billion (N167.2 billion) in 1993 with a profit margin of about 30 per cent shared by marketers,” he said.

 

Sote had earlier confirmed that the lube cracking unit of the Kaduna refinery- the only facility built with capacity to break lube oil, has been in comatose since 20 years ago. The ministry, however, stated that the government was working hard to advance the course of the lube market. “NNPC retailing business was conceived in 2001 by NNPC’s top management to establish its own outlet stations.

 

“The company’s operation began in August 2002 with only two stations in Lagos and Abuja to market petroleum products to the public. NNPC Retail Ltd is now one of Nigerian market leaders in the distribution of petroleum white products through a network of 37 mega stations, 12 floating stations and over 500 affiliate stations nationwide.

 

“NNPC Retail Ltd as one of the leaders in downstream petroleum marketing has decided to venture into the marketing of its own branded lubricants, in line with the NNPC business strategy. The initiative was to consolidate NNPC Retail position and also to complement the white products sold at its branded filling stations nationwide.

 

“In order to enter the market within the shortest possible time, NNPC Retail Ltd opted for a contract blending of its branded lubricants for the short-term. Under this arrangement, NNPC Retail will have ownership of its lubricant formulations and customised packaging materials.”

 

The ministry explained that the NNPC Retail would leverage on its already existing vast network of retail outlets and NNPC subsidiaries as channels for initial market penetration. NNPC Retail intends to adopt a high quality of all its grades of lubricants; the initial 28 entry grades of lubricants proposed are the fast moving grades in the Nigerian market.

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CSR: Fidelity Bank donates sanitary facilities to Ondo

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Fidelity Bank Plc has donated three fully equipped sanitary facilities to the Ondo State Government. The facilities constructed by Fidelity Bank Plc at Aquinas College, Democracy Park and Arakale Motor Park, all in the Akure metropolis, according to a statement from the lender, will enable the host communities maintain better sanitary conditions, improve their standard of living, which will ultimately lead to better productivity and economic development.

Working in conjunction with the Ondo State Ministry of Environment, the Bank, in addition drilled boreholes and provided generating sets to power the facilities thus, ensuring that the project have a lasting impact on the communities. Speaking at the commissioning ceremony, the Governor of Ondo State, Rotimi Akeredolu, commended the Bank for maintaining strong and healthy community relations, adding that through the project, Fidelity Bank has addressed one of the most pressing challenges in Akure, the Ondo State capital. He pointed out that Ondo State was ranked poorly by international organisations such as the United Nations Children’s Fund (UNICEF) and the World Health Organisation (WHO) in the area of open defecation.

“It is a malaise that we are facing in Akure. Access to toilet is a major indicator of economic development in any country. Open defecation and lack of sanitation and hygiene are important factors that cause various diseases. This is why we have every reason to thank Fidelity Bank for these facilities”, he explained.

The governor, however pledged that his administration will work closely with the Bank in the attainment of its developmental objectives. In his opening remarks, the Bank’s Managing Director/Chief Executive Officer, Nnamdi Okonkwo expressed his appreciation to the Governor and people of Ondo State for affording the Bank an opportunity to give back to the society.

Okonkwo, who was represented by the Bank’s Executive Director, Lagos & Southwest, Nneka Onyeali-Ikpe, said the initiative was in fulfilment of the objectives of the Fidelity Corporate Social Responsibility (CSR) philosophy, which rests on a tripod: The Environment, Education and Health.

“We donated these projects in support of the good works of His Excellency, Arakunrin Rotimi Akeredolu and we pledge that this will be on an ongoing basis as we believe very strongly that the relationship between ourselves and Ondo State is a perpetual one”, he explained.

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VAIDS: Adeosun, Fowler for Kaduna stakeholders’ confab

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The Minister of Finance, Mrs. Kemi Adeosun, will on Thursday, March 1st, lead a high-powered Federal Government delegation to the Voluntary Assets and Income Declaration Scheme (VAIDS) stakeholders’ symposium in Kaduna State.

The VAIDS stakeholders’ symposium, according to a statement issued by the FIRS, is being hosted by the Kaduna State Government, and will be attended by the Governor of Kaduna State, Mallam Nasir el-Rufai, Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler, members of the State Executive Council, members of the State House of Assembly, and traditional rulers. Also expected at the tax amnesty sensitization forum, are business leaders, business owners and groups, tax advisers, captains of industries as well as professional and artisan bodies, among other strategic economic groupings within Kaduna State and environs.

The statement noted that the VAIDS stakeholders’ symposium was aimed at promoting greater public understanding of the procedure for the tax amnesty scheme. The FIRS quoted the Min-ister of Finance as stating that regular tax payment by Nigerians was fundamental to the growth and development of the country.

Adeosun noted that predictable tax revenue inflow would lead to more investment by the Federal and State Governments in infrastructure and job and wealth creation across the nation. The Minister urged tax payers to take advantage of the VAIDS opportunity to regularise their tax profiles, adding that tax defaulters would be subjected to investigations as well as made to face criminal prosecution for tax offences upon the close of the VAIDS window.

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New technology to boost Lagos’ IGR beyond N504bn in 2018

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Confronted with the challenge of poor remittance of collected taxes, Lagos State Government yesterday said it is leveraging world-class technology to boost its internally generated revenue (IGR) this year beyond N503.7 billion it generated as IGR in 2017. State Governor, Mr. Akinwunmi Ambode, said this at a forum in Lagos yesterday where it unveiled the new automation system called Electronic Revenue Assurance System (ERA) through, which it would be collecting taxes from hoteliers, event centres, eateries, among in the state. Ambode said Lagos expected that effective deployment of technology would enable the state to surpass the IGR generated by the state last year. In 2017, the total amount of IGR by the state stood at N503.7 billion (or approximately, N504 billion). The introduction of ERA is coming on the heels of a new regulation for the fiscalisation of the Hotel Occupancy and Restaurant Consumption Tax Law.

Ambode, who spoke at a stakeholders’ meeting held at Lagos House in Alausa, Ikeja to sensitize owners of hotels, restaurants, bars and event centres in the State on the new regulation, said automation of the system was introduced to address the high level of under-payment and non-remittance of what is due to government, however, assuring that it would be a win-win situation for all parties. He gave a charge on stakeholders in the hospitality industry to embrace the initiative designed to put efficient machinery in place to enhance collection process and ensure compliance.

Ambode, who was represented by the State’s Deputy Governor, Dr. Idiat Adebule, said it was important for all stakeholders to play their part in scaling up taxation being one of the ways the government is able to fund its activities and implement projects and policies for the overall benefit of the people. Addressing the stakeholders, the Governor said: “As progressive partners in the development of our dear State, we solicit for your co-operation and support at actualizing this noble initiative.

“All hoteliers, event centre proprietors, restaurant and bar owners must allow the integration of their systems along with the Lagos State Internal Revenue Service (LIRS) server to facilitate the monitoring of consumption tax transactions and remittance of same to the State.

“We must be alive to our responsibilities by paying taxes due in order to ensure the development of our dear State,” he said. The Governor said since his assumption of office, conscious efforts have been made to invest heavily in infrastructure, and that more funds were required to enable the government actualise the objective of providing adequate infrastructure and services for residents, a development he said necessitated the need to embrace the fiscalisation of the consumption tax regime.

According to him, despite harsh economy, the 2017 budget of the State performed at 82 per cent with N503.7 billion total generated revenue representing 78 per cent performance, while total recurrent expenditure stood at N281.33 billion representing 72 per cent and N387.60 billion capital expenditure representing 76 per cent performance.

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