Tag: barrel

  • ‘Oil price may hit $51 per barrel’

    NIGERIA’s Brent crude price may increase by between $2 and $3 per barrel in the coming weeks, on the back of stable demand and low volatilities, a report by the global oil research firm S&P Global Platts, has predicted.

    This implies that crude oil price, which stood at $48.27 per barrel, last week, would increase to $51 per barrel or more, signalling a good omen for Nigeria, which depends on crude oil for its fiscal responsibilities.

    Brent crude was $48.27 per barrel last week, down $1.85, or 3.7 per cent, from its $50 per barrel price.

    According to Platts, Nigeria will experience a slight surge in price of Brent crude, despite the recent increase in supply of crude oil globally, a development, which has threatened cut in oil production introduced by the Organisation of Petroleum Exporting Countries (OPEC) for its members.

    Platts said the decision of the United States to increase its light crude and gasoline stockpiles has stoked fears that the global oil glut would remain unabated.

    The report said: “Overall, stable demand and low volatility are the factors that should push Brent prices up by $2 or $3 in the coming weeks. Oil tumbled to its lowest in five weeks as an unexpected increase in U.S. crude and gasoline stockpiles stoked fears that the global supply glut will remain unabated.”

    The oil research firm noted that the considerable drop in Brent futures prices, soon after the OPEC’s meeting in May 25, this year, was mainly caused by an extension of the production cuts, and high level of speculation in the market.

    It said the International Energy Agency has recently published a forecast, stating that the global refinery is expected to go up by 2.7 million barrels per day (bpd) between July and August with refineries processing almost 82 million bpd for the same period.

    Quoting a report from the United States-based International Energy Agency (EIA), Platts said U.S drillers have added rigs for 20 straight weeks, the longest streak in at least three decades to increase production.

    It added that the agency has published a forecast stating that the global refinery throughput is expected to go up by 2.7 million bpd between July and August, with refineries processing almost 82 million bpd for the same period.

    A Market Research Manager, Tradition Energy in Stamford, Gene McGillian, said in the report that fears of oversupply was driving the market, adding that crude oil price would appreciate soon.

  • Nigeria as rotten barrel

    IR: ’A rotten apple spoils the whole barrel’ is the proverbial saying that has been used by many to describe how corruption spreads. This suggests that a bad person can infect/corrupt a group of people. As corruption is both systemic and endemic in Nigeria, it begs the question: Is Nigeria a rotten barrel?

    According to the Organisation for Economic Co-operation and Development (OECD), corruption increases the cost of doing business; excludes the poor from public services; and, delegitimizes the state. Corruption also has adverse budgetary effects in that it leads to waste or the inefficient use of public resources. Imagine schools without chairs; hospitals without drugs; pensioners without pension; housing units without water; citizens without passports; Internally Displaced Persons (IDP) camps without food, and universities without research laboratories. Sadly, you do not have to imagine too hard. This is the reality that depicts the Nigerian state, which can be equated to the decay that occurs in a rotten barrel.

    The rotten barrel notion suggests that corrupt tendencies in a person can be attributed to widespread societal influences and pressures. Citizens have been shaped by standards and customs in the society that permit dishonesty. This implies that the likelihood of being incorruptible in an environment predisposed to corruption is extremely low if not near impossible. Researchers at the University of Nottingham and Yale University found that corruption not only harms a nation’s prosperity but also shapes the moral behaviour of its citizens. The impact of corruption is more damaging when the barrel is rotten because people tend to acclimatise in the rot. Imagine stepping out of a crowded room for a while and stepping back into the room only to discover the air in the room is stale and pungent and has always been. Citizens are simply unable to link corruption to the state of their affairs, as they are also infected with the same virus.

    How else does one justify a corrupt politician being publicly celebrated in his constituency even though he steals from them? Or how a former chairman of an agency charged with an anti-corruption mandate is being investigated for corruption. Little wonder that with the recent discovery of over N13 billion in a Lagos apartment, citizens are being subjected to an episode of -Whose Money is it Anyway? Multiple interests continue to vie for ownership of the funds. Many Nigerians are now wondering whether this is a deliberate attempt to divert attention away from the money so that the real looters can get away with it.

    Is the story all bleak then? Corruption is ultimately a learned behaviour and as such the fight against corruption, though multi-faceted, must be primarily focused on behavioural change strategies and interventions if it is to be sustained and effective.

    By focusing on behavioural change strategies and interventions, the fight against corruption will progressively be championed by all. Institutions, such as the home, religious institutions and schools, responsible for value reorientation and learning should be targeted. Places of learning should be specifically targeted as they are where an understanding of what corruption is in the Nigerian context and its associated risks and impacts should emanate from.  Being able to identify what corruption really is, the cost of corruption and how much of a corruption risk an individual or organisation is are good places to start.

     

    • Doyin Olawaiye,

     doyin.olawaiye@integritynigeria.org

  • Petroleum mode and pork barrel governance (2)

    Just as the new minister of power has set out to look for the root cause of decades of epileptic power supply in the country, so do the president and his team need to look for the root cause of the country’s under-development, in spite of half a century of over $500 billion revenue to the country from petroleum.

    • Initiate action to amend our Constitution with a view to devolving powers, duties and responsibilities to states and local governments in order to entrench true Federalism and the Federal spirit;
    • Prevent abuse of executive, legislative and public offices through greater accountability, transparency and strict enforcement of anti-corruption laws whilst strengthening the EFCC and ICPC;
    • Amend the Constitution to remove immunity from prosecution for elected officers in criminal cases;
    • Restructure government for a leaner, more efficient and adequately compensated public service;
    • Balance across regions by the creation of 6 new Regional Economic Development Agencies (REDAs) to act as champions of sub-regional competitiveness;
    • Put in place a N300 billion regional growth fund (average of N50bn in each geo-political region) to be managed by the REDAs, encourage private sector enterprise and support to help places currently reliant on the public sector;
    • Initiate policies to ensure that Nigerians are free to live and work in any part of the country by removing state of origin, tribe, ethnic and religious affiliations and replace those with state of residence. –FROM Buhari/APC MANIFESTO

    By way of summary, last week’s piece emphasised the negative impact of a false feeling of affluence from steady flow of revenue from petroleum on the structure, content, and style of governance in the country in the last 50 years. More specifically, we argued that the belief of military rulers that “money is not Nigeria’s problem but how to spend it” influenced military dictators between the civil war and the exit of military dictatorship in 1999 to create 36 mini-states and 774 local governments that turned the country into multiple sites of compulsive consumption and very little production. It also spawned a culture of profligacy in compensation of political office holders in a country where over 70% of the population live below poverty line, while also giving birth to innumerable agencies to do what other layers of government are constitutionally designed to do. We also added that citizens were alienated from government by being largely released from paying taxes, just as they were excluded by military dictators and their civilian successors from the process of creating the current constitution that is to drive governance under President Buhari, also  a one-time military dictator.

    Today’s focus is to elaborate on the thesis of last week: the need to take advantage of huge decline in revenue from petroleum to redesign the structure, content, and style of governance, including response by the government and citizens to the need to finally use the spirit and ideology of change promised by President Buhari and the All Progressives Congress to re-invent the country with the goal of enlarging the space of freedom;  strengthening the architecture of security; enforcing transparency in governance; re-designing the architecture of governance; and transforming states into centers of productivity rather of parasitism on revenue from petroleum or other non-renewable mineral resources-solid or liquid.

    In contrast to the regional model inherited from the British colonial master at independence, military dictators became too unrealistic about the abundance of petroleum, to the extent that they felt emboldened to re-conceptualise Nigeria. Instead of continuing the tradition of a system of three or four regions that compete in terms of economic activities and cooperate by ensuring the survival of the country as a political or territorial unit, military dictators misread the significance of petroleum by viewing it as the sole driver and sustainer of unity. Abundance of petroleum spawned a culture of profligacy; killed economic production in the states under military rule and after; encouraged military rulers to create mini-states as administrative units to guzzle the revenue from oil; and also created a political class addicted to exorbitant personal emoluments, despite having immense opportunities to rob the state. Sixteen years after the exit of military rulers, retired General Buhari and the APC realised that the country needed to be mended through changing the modus operandi of running the country.

    Despite the existence of 36 states with sizable bureaucracy, oversize pay packets for political office holders, and easy access to unwholesome hands of political leaders in the country’s treasury, the social statistics remain depressing. 62 million Nigerians are illiterate; 70% of Nigerians live below poverty line; Nigeria has between 3,000 and 4,000 megawatts of electricity for 170 million citizens; Nigerian manufacturers have to run to Ghana and even Benin Republic to do light manufacturing; more women die at childbirth in the country than any other country in the sub-region; infant mortality in the country remains one of the highest in the world; over 160 million Nigerians are transported daily by mini buses and motor cycles; etc.

    It was therefore not surprising that General Buhari and his party chose the path of change when they crafted the manifesto for the 2015 presidential and state elections. It is still not surprising that after winning the presidency, President Buhari and his party are singing, as enthusiastically as ever, about the imperative of change. Since the election, many pundits have blamed the failure of the country in the last five decades on poor quality of leadership or on the existence of ethnic and religious diversity. Others pontificate on the web about the reluctance of Nigerians to evolve into new post-colonial personas that choose cultural amnesia by demonising their cultural past. Such pundits blame the inability of citizens to undo the diversity that served them well in the years before independence and that has the potential of making them create one of the world’s most developed countries with cultural diversity.

    Many public commentators have complained about lack of a grand vision conveyed in a grand narrative of Buhari presidency’s pre-figuring of the Nigeria he wants to leave behind at the end of his tenure. However, the manifesto with which he negotiated for votes is full of episodic narratives that can add up to a grand vision, if the objectives of such episodic stories are met sincerely and realistically. It is reassuring to note in the manifesto (part of which the bullets overleaf represent) that the president and his party did not just choose the path of escaping from the country’s cultural diversity into cultural homogeneity through individuals’ efforts to re-invent themselves culturally. In a list of what to do that include food self-sufficiency through agriculture and revenue generation through solid minerals, passing N5,000 from the national purse to 25 million poor citizens; free education, free meal in school, improvement of power and other infrastructure; fighting Boko Haram terrorism and political and bureaucratic corruption; the president clearly promised in the first line of his manifesto the need for a new design of the polity bequeathed by military dictators. He has pledged to use his presidency to: initiate action to amend our Constitution with a view to devolving powers, duties and responsibilities to states and local governments in order to entrench true Federalism and the Federal spirit. He and his party also seem to have recognised the need to return to regional economic planning and development: Balance across regions by the creation of 6 new Regional Economic Development Agencies (REDAs) to act as champions of sub-regional competitiveness.

    Details of what to do “to entrench true Federalism and the Federal spirit,” are missing in the episodic narrative of change in the nation. But what to do to promote “regional economic planning and development” shows the impishness (birthed by the philosophy and sociology of spending petrodollars) of throwing money at problems by creating bureaucracies to administer, rather than solve problems. The pledge of Buhari and the APC to re-craft the 1999 Constitution with the aim of re-federalising the country needs be addressed with as much speed and enthusiasm as doing everything else on the manifesto.

    Just as the new minister of power has set out to look for the root cause of decades of epileptic power supply in the country, so do the president and his team need to look for the root cause of the country’s under-development, in spite of half a century of over $500 billion revenue to the country from petroleum.

    – To be continued

     

  • Oil theft ; N7.35bn loss recorded daily- FG

    Due to oil theft and shortfalls in oil production in the country, the Federal Government says  it is losing 400,000 barrels per day.

    Delta State Governor, Emmanuel Uduaghan disclosed this to State House correspondents at the end of the National Economic Council (NEC) meeting chaired by Vice President Namadi Sambo.
    The NEC, which comprises the 36 state governors, ministers of National Planning, Finance, FCT, CBN governor, also took steps on Thursday  to curtail the rising incidences of oil theft in the country including immediate prosecution of oil vandals and thieves.
    The daily loss of 400,000 barrels of oil per day at an international price of $117 per barrel, converted to naira at the exchange rate of N157 to a dollar gives N7.35 billion total loss per day.
    Uduaghan, who was appointed to head the Oil Theft Committee at last month NEC meeting, said that the Committee was working on providing both long and short term strategies.
    On the interim measures being taken, he said: “A technical level meeting involving key stakeholders has been held, where concerned agencies including security outfits have made useful submissions, with more submissions expected from other stakeholders, especially from the oil producing states.”
    “The Committee has moved to address the issue of the 400, 000 barrels per day production shortfall. The Governors of Bayelsa and Delta have been mandated to meet with the concerned oil majors and the JTF to work out modalities for the effective repair of the Nembe and Trans Niger pipelines which are currently shut.”
    “The Committee also mandated Akwa Ibom Governor, Obong Godswill Akpabio, CON, Secretary to National Planning Commission, the NEITI chief executive and a representative of the Inspector-General of Police to meet with the Attorney-General of the federation towards strengthening the extant deterrence policy by ensuring more arrests and convictions of the oil thieves.”
    “In this regard, a meeting of the Governor Akpabio-led Committee with the AGF this morning, agreed on the following resolutions: A legal task force, headed by the AGF to be set up immediately to commence prosecution of proven cases, using relevant laws; particularly the miscellaneous offences Act which carries a sentence of 21 years without option of fine.”
    According to him, the legal task force, which is to be in force for one year with effect from July, 2013, is to be made up of representatives from the NNPC, the Armed Forces, Civil Defence, Police, SSS and other related agencies.
    While prosecution of established cases will continue and all convictions to be given wide publicity, he said that the members of the task force would be announced by the AGF on Monday 22 July, 2013.
    “The Council commended the efforts of the Committee and further urged it to ensure that the bid to repair the shut pipelines is achieved within the targeted period of six to eight weeks.” He stated