TotalEnergies has signed an agreement with Scatec, a Norwegian renewable energy company, to acquire 100% of its subsidiary SN Power, which holds interests in renewable hydropower projects in Africa, through a joint venture (51% SN Power) with Norfund and British International Investment (BII).
TotalEnergies
As a result of this transaction, which is subject to certain previous conditions, TotalEnergies will acquire a 28.3% stake in the Bujagali hydropower plant currently in operation in Uganda. With a capacity of 250 MW, it covers more than 25% of the country’s peak electricity demand.
TotalEnergies will also acquire minority stakes in two projects under development in Rwanda (260 MW) and Malawi (360 MW).
“This acquisition of renewable hydroelectric assets and projects in Africa reflects our desire to contribute to the continent’s energy transition by bringing electricity to the people of African countries. In particular, we are delighted to be able to become a player in hydro power in Uganda, a country where we are also developing a major oil project. This is another example of TotalEnergies’ ability to implement its multi-energy strategy in oil-producing countries to support them in their energy transition,” said Patrick Pouyanné, Chairman and CEO of TotalEnergies.
“We are pleased to announce today’s transaction, as we believe TotalEnergies will be a strong asset owner going forward, with the ability to further develop the projects and contribute to the energy transition in Africa. We would like to thank the entire hydropower team for their hard work and dedication over the years, you have made a significant impact. In addition, our gratitude goes to our joint venture partners, host governments, and lenders for the support since 2020,” said Terje Pilskog, CEO of Scatec.
To date, TotalEnergies has interests in a number of hydropower projects with a gross capacity of 3.7 GW worldwide:
218 MW installed in France (19 MW), Portugal (33 MW) and Turkey (166 MW)
5 GW under development in Mozambique ( Mphanda Nkuwa project)
In the global fight against climate change, the difference between where the world is and where it needs to be is a function of finance. For developing countries like Nigeria, this is especially necessary because the transition to a green, low-carbon economy will address climate challenges, create sustainable jobs, and gainfully employ its teeming population.
Adamu Garba
Nigeria has continued to take actionable steps that will drive its green economy transition, including the enactment of the Climate Change Act, the amended Electricity Act, the launch of the energy transition plan, commitment to a 2060 net-zero target, the launch of the clean cooking policy, ambitious Nationally Determined Contributions (NDCs), and the pledge to triple renewable energy capacity, among others.
To drive the transition, the current administration under President Bola Ahmed Tinubu set up a presidential committee on climate action and green economic solutions to oversee and coordinate all national policies and programmes related to climate action and green economic development.
However, all plans, policies, and frameworks require adequate funding to actualise them. The Africa Development Bank (AfDB), in its 2023 Country Focus Report, states: “Nigeria’s climate financing needs over 2020 – 2030 were estimated at US$247.3 billion (an annual average of about US$22.5 billion), with mitigation activities constituting the largest proportion (71.5 per cent) of the financing needs.
“Nigeria thus has a total climate financing gap of US$20.5 billion per annum, which is required for investments in renewable energy, smart agriculture, sustainable transport, water and waste management solutions, and so on, among other potential green sectors.”
Given the preceding, the accreditation of the Development Bank of Nigeria (DBN) as the first Direct Access Entity (DAE) in Nigeria to the Green Climate Fund (GCF) announced on July 17, 2024, was met with great enthusiasm by stakeholders across various verticals of the Nigerian green space. The GCF is the world’s largest dedicated fund, helping small island states and the least developed and developing countries reduce greenhouse gas emissions and enhance their ability to respond to climate change.
The accreditation, announced at the 39th meeting of the GCF Board in South Korea, creates new opportunities to boost Nigeria’s green economy. The Federal Government of Nigeria established the DBN with global development partners to address the significant financing challenges facing Nigeria’s micro, small and medium-sized enterprises (MSMEs).
It also aims to allow MSMEs to execute climate-resilient and green projects supporting the global green transition and sustainability drive. The development finance institution has a track record of channelling resources through loans and guarantees and has disbursed over N933 billion in loans.
The direct access feature under the GCF is designed to help developing countries integrate climate funding within their national climate action plans, such that a DAE, in this case, the DBN, is authorised as a national organisation to receive project funds on behalf of the country, streamlining the process and avoiding high transactional costs associated with using external intermediaries.
A significant milestone for Nigeria
The DBN’s accreditation achievement marks a significant milestone for Nigeria’s green economy goals. According to the GCF, the organisation has the potential to support its work in mobilising climate finance at scale, enhancing private sector participation, and diversifying the use of financial instruments such as loans.
With scaled climate finance, the Nigerian government will be able to drive innovative climate-smart solutions, advance already existing initiatives, improve efficiency in using natural resources, boost power generation with renewables, facilitate clean transportation, and change production and consumption systems.
Also, access to loans, occasioned by the accreditation, will cause the private sector, especially MSMEs, which make up 96.7% of all businesses and contribute over 45% to Nigeria’s gross domestic product (GDP), to develop innovative and new business models, and low-carbon technologies that will drive Nigeria towards its green economy goals.
These potentials point to the fact that the DBN’s successful accreditation is a step in the right direction, aiding Nigeria in reducing its oil dependence and contributing significantly to global decarbonisation efforts.
It is important to note that the DBN states that all MSMEs (start-up or existing) involved in productive enterprises across Nigerian communities are eligible for loans with a flexible repayment tenure and market-conforming interest rates (up to 10 years with a moratorium period of up to 18 months). So far, they are customers of eligible participating financial institutions (PFIs), such as commercial, microfinance, and development banks.
With knowledge of the intended project areas under the GCF accreditation, which include energy generation and access, transport, health, food and water security, infrastructure, and the built environment, it is therefore advisable that MSMEs be properly positioned to take on sustainable businesses that would allow them to leverage the loan to address climate challenges in Nigerian communities.
To ensure that the fund addresses the intended key areas, the DBN must hold the PFIs, who will be custodians of the loan, to the strictest measures. The PFIs should, in turn, ensure that the MSMEs are held accountable.
Additionally, Nigerian communities, which have, over the years, suffered disproportionately from the adverse effects of climate change, should take advantage of this opportunity to work with rural MSMEs to access funding that will scale local and Indigenous solutions, which would bring succour to affected populations.
The possibilities offered by this single accreditation make one wonder how having multiple accreditations can help a nation tackle climate change challenge. Therefore, other relevant organisations, government bodies, and public and private sector entities should seek to acquire similar accreditation, as this will further bridge Nigeria’s access to the much-needed climate finance intervention.
By Adamu Garba, Chief Operating Officer, Nigeria Climate Innovation Centre
There is need for Lagos State Government to support the regulatory commission in carrying out their role for effective regulation in the water sanitation sector of the state in order to achieve equitable service delivery both for the consumers and service providers.
Participants at the Learning Meeting in Lagos
Dr. Adebayo Alao, WaterAid Lagos Programme Lead, made this submission while giving his remarks at the Learning Meeting with the Lagos State Water Regulatory Commission (LASWARCO) on the way forward towards the provision of clean water, sanitation and hygiene for residents of the state.
Dr. Alao said: “The cholera outbreak currently rampaging the state can be traced to the contamination of the water bodies but if there is adequate regulation of those that are managing sanitation especially those that are providing water services even at the level of council or community level, they are suppose to have the necessary and the skills to know that water facilities should not be located or sided close to each other because of that interaction, then you will see that some of these things will be greatly reduced.
“So, the government should should support the regulators in their quest to have well sanitised water sanitation sector. I am also happy to see that the Water Sanitation Hygiene Policy that has been approved by the government has helped us to clarify roles and responsibilities, so through that policy issues around overlapping functions have been removed so every agency is now very clear on their mandate and what responsibility they have in relation to water sanitation hygiene services. There is need for those at the local government level to cooperate with the regulators at the state level because practices that abound at the council level is more dealing with those that are not licensed to operate. Laising with those at the state level will help bring sanity into the profession which will bring about quality service delivery.”
Dr. Alao reiterated: “WaterAid is interested in making sure that everyone everywhere has access to adequate sanitation and water supply services in order to meet the Sustainable Development Goals-SDG 6 that says everyone should have access to safely managed sanitation by year 2030, that is why we are collaborating with with government agencies to enable us meet the target.”
The Learning Session helped build a stronger relationship with LSWARCO, in their areas of responsibility, operational scope, and challenges relating to WASH and aligning efforts to improve water and sanitation services.
The stakeholders meeting sponsored by Later-Day Saints Charities witnessed representatives from Lagos Water Cooperation (LWC), Lagos State Waste Water Management Office (LASWAMO), as well as three LCDAs (Ikorodu North, Ojodu and Ikotun Egando) and other relevant agencies and MDAs.
The Society of Petroleum Engineers (SPE) Nigeria Council has confirmed speakers for the 47th edition of the Nigeria Annual International Conference and Exhibition (NAICE) 2024. The event will take place from August 5 to August 7, 2024, at the Eko Hotel in Lagos, under the theme “Petroleum Industry Value Chain Optimisation: The Inevitability of Midstream and Downstream Development.”
Oba Prof. Saka Matemilola
His Royal Majesty, Oba Prof. Saka Matemilola, Olowu of Owu Kingdom in Abeokuta and a past Chairman of the SPE Nigerian Council, will honour the event as the Special Guest of Honour.
The confirmed line-up of distinguished speakers includes: Terry Palisch, 2024 SPE International President; Herbert Krapa, Minister of Energy, Ghana; Farouk Ahmed, Authority CEO, NMDPRA; Roger Brown, MD/CEO, Seplat Energies; Elohor Aiboni, MD, SNEPCO; Gbite Falade, MD/CEO, Aradel Holdings; Sanjeev Verma, Vice President, Halliburton; Audrey Joe-Ezigbo, Managing Director, Falcon Corporation; and Debo Fagbami, MD, NEDOGAS, amongst others.
“Our line-up of speakers for NAICE 2024 truly reflects the pinnacle of expertise and innovation in the petroleum industry. These esteemed leaders and visionaries are set to inspire and challenge us, ensuring that our discussions drive real value chain optimisation and transformative progress across the midstream and downstream sectors. Their participation underscores the event’s reputation as a hub of ground-breaking ideas and collaborative solutions,” said Salahudeen Tahir, Chairman of the Society of Petroleum Engineers (SPE) Nigeria Council.
This year’s NAICE will also feature two pivotal panel sessions. These sessions will explore “Unlocking Upstream Value: Developing Markets, Trade Access, and Facilitating Partnerships in the Midstream and Downstream” and “Energy Security: Exploring the Interplay Between Technology, Market Dynamics, and Organisational Capabilities.” Additionally, the Topical Issues Workshop will address “The Outlook of the Nigerian Oil and Gas Industry, Post IOC Divestments and Exits: Challenges and Opportunities,” examining the sector’s future landscape.
“This year’s conference will focus on current market trends and economic forecasts while highlighting the crucial roles of inclusivity and leadership development in our industry,” Tahir said.
Other highlights of NAICE 2024 include the Young Professionals’ Workshop, The Women Leadership Programme, the Oil Industry Night & Awards Dinner, Family Recreation Activities, and Exhibition.
NAICE 2024 will feature the Young Professionals’ Workshop, focusing on “Market Trends and Economic Outlook in the Downstream and Midstream Sector,” to provide emerging professionals with crucial insights and skills. The Women Leadership Programme will address “Equality by Design,” promoting gender inclusivity through discussions led by influential female leaders.
The Oil Industry Night & Awards Dinner will celebrate excellence and innovation, presenting awards to outstanding professionals and organisations. According to the promoters, attendees can explore cutting-edge technologies at the exhibition, while family programmes offer entertainment, ensuring a well-rounded experience for all.
The Society of Petroleum Engineers (SPE) Nigeria Council is a premier professional association dedicated to advancing energy resource development and production. SPE supports its members through publications, events, training courses, and online resources, fostering excellence and innovation in the industry.
Scientists from Purdue University (US) have found that, in a few years, West Africa, South Asia and the Midwest in the US will become dangerous for human life due to climate change.
Heat stress
West Africa and parts of South Asia are among the most vulnerable, according to the research – regions which have very dense populations and often little access to air conditioning.
Richer countries will fare better but will not escape unscathed. Hotspots of extreme humid heat will emerge in parts of the US, including the Midwest, as global warming ticks up, the study found.
Today’s searing-hot summers will likely seem cool by future standards, and the heat we experience is changing in ways that are not in our favour.
Extreme, humid heat is persisting at nighttime, depriving the body of vital time to recuperate.
And we can expect more back-to-back heat waves, slamming regions with successive cycles of brutal heat, said Jane Baldwin, assistant professor of Earth system science at the University of California Irvine.
Heat already kills an estimated 489,000 people each year, according to the World Health Organisation, but the real toll could be higher because heat-related deaths are so hard to track.
Deaths may be attributed to heart attacks or strokes, with no reference to the fact they happened during a scorching heat wave.
“We’re absolutely undercounting in a serious way,” said Bharat Venkat, director of the UCLA Heat Lab.
Every week of summer brings more stories of people like the ultra-marathon runner Philip Kreycik, whose tragic, early deaths are entirely preventable.
Heat lacks the blunt force of a hurricane, the scorched earth of a wildfire or the sweeping devastation of a flood – all of which leave a visible and immediate trail of devastation, destroying homes, tearing up roads and flattening towns.
Instead, heat is a creeping threat, a steady hum in the background. Its worst damage is not to property but to our bodies, Venkat said. And it is an “invisible, silent killer.”
A well-known Mexican newspaper Milenio has published an article about the 29th session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP29), which will be held in November 2024 in Azerbaijan.
Baku in Azerbaijan hosts COP29 in November 2024
According to the Azerbaijani Embassy in Mexico, the author said this year marks an important stage in the global fight against climate change, emphasising that Azerbaijan, located at the intersection of Europe and Asia, demonstrates a strong commitment to sustainability and transition to a low-carbon economy.
According to the author, it is gratifying to see how in today’s volatile and turbulent world, Azerbaijan, famous for its inclusiveness and multiculturalism, which chaired the Non-Aligned Movement and is active in many issues on the international arena, is taking a step forward in addressing such an existential problem as climate change and receives great support from the international community.
Speaking about Azerbaijan’s leadership in this context, despite the oil industry, the author stated that the serious approach of such countries to the problem of climate change gives hope. The author noted that Azerbaijan has made significant progress in the field of sustainability, invests in renewable energy sources, in particular solar and wind energy, and makes appropriate decisions to reduce dependence on fossil fuels, becoming a regional leader in clean energy thanks to its strategic location and important natural resources.
The author recalled that the wind energy potential of the Caspian Sea is about 157 GW. The article states that Azerbaijan is a country with great potential in terms of renewable energy sources and technical capabilities, where solar (Garadagh, Shafag) and wind (Khizi-Absheron) stations have recently been built, and additional wind and hydroelectric power projects are being implemented.
The article emphasised that these initiatives reflect Azerbaijan’s commitment to expand renewable electricity generation capacity as part of a strategy to achieve a 30 percent renewable energy share in electricity production by 2030.
Regarding Mexico’s position on climate change, the author noted that, under the leadership of the newly elected president of the country, active environmental advocate Claudia Sheinbaum, the country attaches great importance to its climate change commitments. The author stated that Mexico, as an important actor on the international arena and a member of the G20, given its good bilateral relations with Azerbaijan, can demonstrate its commitment and active participation in this important issue, and that both countries face similar challenges in adapting to climate change and transitioning to renewable energy sources.
The author also emphasised the importance of developed countries’ financial assistance to developing countries to implement strategies to mitigate and adapt to climate change. Recalling that Mexico is largely vulnerable to the effects of climate change, the author spoke about the possibility for the country and other developing states to benefit from climate financing that will be discussed at COP29.
“This funding is crucial for green infrastructure projects, renewable energy sources and climate resilience programmes. The COP29 agenda will include discussions on climate finance mechanisms, implementation of the Paris Agreement and international cooperation to reduce greenhouse gas emissions and is expected to address topics such as climate justice, resilience of vulnerable communities and technological innovations to combat climate change,” the article says.
In conclusion, regarding Mexican-Azerbaijani ties, the author notes that relations between the two countries are strengthening, and the two countries share common interests in areas such as education, culture and especially environmental protection. The author emphasises that cooperation on sustainable development projects can benefit both countries in terms of knowledge exchange and green technologies.
“COP29, which will be held in Azerbaijan, is a unique opportunity for countries to reaffirm their commitment to the climate agenda and cooperation in innovative solutions. This conference will be an important platform for Mexico under the leadership of Sheinbaum to once again reaffirm its commitment to environmental issues and explore new opportunities for international cooperation,” the article notes.
As the landscape of nicotine and tobacco products evolves, traditional tobacco control policies are increasingly challenged by the emergence of new products, such as e-cigarettes, nicotine pouches, and heat-not-burn devices. These products, while still delivering nicotine, often present different health risks compared to conventional tobacco products. This has led to calls for separate policies addressing nicotine and tobacco, recognising their distinct characteristics and potential impacts on public health.
Nicotine and Tobacco
Nicotine, while addictive, is not the primary cause of tobacco-related diseases such as cancer, heart disease, and respiratory conditions. These health issues are largely linked to the combustion process in smoking, which releases harmful toxins. Therefore, products that deliver nicotine without combustion, such as e-cigarettes and nicotine pouches, are generally considered to pose a lower risk than traditional cigarettes.
This distinction suggests that a one-size-fits-all approach to regulation may not be appropriate. Separate policies for nicotine and tobacco could allow for more nuanced regulation, taking into account the specific risks and benefits of different products.
Why Separate Nicotine Policy is Necessary
The Framework Convention on Tobacco Control (FCTC) recommends stringent tobacco control measures, such as high taxes and advertising bans. However, these measures may not be entirely practical for African smokers, particularly given the rise of emerging nicotine products like e-cigarettes and nicotine pouches. Many African countries lack comprehensive cessation support and resources, making it challenging for smokers to quit. Additionally, overly restrictive regulations on reduced-risk nicotine products could limit access to potentially less harmful alternatives, which are crucial for harm reduction in regions with limited healthcare infrastructure.
Differentiating between nicotine and tobacco products can enable risk-proportionate regulation. For instance, less harmful nicotine products might be regulated to minimize youth access and prevent non-smokers from initiating use, while still allowing adult smokers access as a harm reduction tool. In contrast, more stringent regulations might be applied to combustible tobacco products due to their higher risk profile.
A separate nicotine policy could support public health goals by promoting safer alternatives for current smokers. By providing a clear regulatory pathway for reduced-risk nicotine products, governments can encourage smokers to switch from combustible tobacco to less harmful options. This approach is aligned with harm reduction principles, which aim to reduce the negative health impacts of harmful behaviors without necessarily requiring total abstinence.
The nicotine market is rapidly innovating, with new products emerging that offer varying levels of harm reduction potential. A dedicated nicotine policy can facilitate the responsible introduction and oversight of these products, ensuring they meet safety standards while allowing for consumer choice. It can also provide a framework for research and public education on the relative risks of different nicotine products.
Clear distinctions in policy can help improve public understanding of the risks associated with different products. Misinformation about nicotine and its health impacts can lead to misconceptions that all nicotine products are equally harmful. By separating policies, governments can more effectively communicate accurate information, helping consumers make informed decisions.
The evolving nature of nicotine and tobacco products necessitates a rethinking of traditional tobacco control frameworks. By implementing a separate nicotine policy, governments can better address these products’ distinct risks and benefits, promoting public health through harm reduction and informed consumer choice. This approach reflects the scientific understanding of nicotine and tobacco risks and aligns with the principles of modern public health policy.
By Joseph Magero, Chair, Campaign for Safer Alternatives
A rare opportunity to see soil from the moon in person captivated crowds as the lunar sample from China’s Chang’e-5 mission was under the spotlight in Bangkok.
China’s Chang’e-5 mission
The lunar sample was featured as one of highlights at Sci Power for Future Thailand Fair that concluded on Sunday, July 28, 2024.
This is due to under collaboration between the National Astronomical Research Institute of Thailand (NARIT) and the China National Space Administration (CNSA).
Enclosed in a rotating crystal sphere, the 75-milligram sample named “The Moon Shines Bright on Me’’ invited visitors on a microscopic journey to the moon’s surface and they marvelled at the extraterrestrial material up close.
Experiencing the mysterious substance for the first time, elementary school student Tannya Neesanant was filled with excitement.
“The lunar sample’s unusual colour intrigued my curiosity, as it appeared to be sand rather than soil,’’ the seven-year-old told Xinhua.
The exhibit is a portion of samples that Chang’e-5 lunar probe collected, one of the most complicated and challenging missions in China’s aerospace history.
They are being able to get closer than ever to the moon really inspired people from diverse backgrounds who visited the display, particularly children.
They fuelled their passions for learning and pursuing their goals, said Suppawat Zhou, a staff member at the exhibition.
“It is truly rewarding to see visually impaired and deaf students learning about the exhibits through the interpretation from their teachers, which sparked their keen interest in astronomy, space and technology,’’ he added.
NARIT head Saran Poshyachinda said the exhibition also showcased advanced technologies Thailand had developed for astronomical research, such as an instrument designed to observe cosmic radiation and space weather.
Space weather from lunar perspective that would aboard China’s Chang’e-7 moon exploration mission as designed.
In April, China and Thailand signed two memorandums of understanding to cooperate on exploration and peaceful use of outer space as well as on an international lunar research station.
“We are looking forward to receiving lunar samples from the CNSA for our laboratory test.
“We can develop suitable instruments for future exploration on the moon’s surface.
“Collaboration with China is very crucial for developing our own capabilities and helping us to be in line with global leaders,’’ he said.
Widespread flooding has hit southern regions and states in Myanmar, displacing tens of thousands of people and submerging infrastructure facilities.
Flooding in Myanmar. Photo credit: AP Photo/Thein Zaw
The water levels of rivers in 13 towns across the four regions and states of Ayeyarwady, Bago, Mon, and Kayin in southern Myanmar have already surpassed their warning marks on Monday, July 29, 2024.
The report is according to the national weather agency reported as reported on Monday.
In Bago township of Bago region, a total of 18,210 people from 4,793 households had been evacuated due to flooding caused by continuous heavy rains in recent days.
The official daily The Mirror reported.
In Myawaddy township of Kayin state, 4,985 people from 370 households were taking shelter in 11 relief centres in the township due to the rise of Thaungyin River caused by incessant rains.
Railway tracks and highways in Ayeyarwady region and Mon state have been submerged, posing risks to travellers, while schools have been closed due to the floods.
In addition to the four regions and states in the Southeast Asian country, Taninthayi town in Taninthayi region experienced flooding on Sunday as a result of rising water levels of Taninthayi River.
It is caused by torrential rains, according to the report.
Local authorities, fire service personnel, and rescuers in the affected areas have been working together to evacuate residents and provide them with essential supplies such as food, drinking water, and shelter.
The Federal Government has ordered NNPC Limited (NNPCL) to sell crude oil to Dangote and other local refineries in naira.
Dangote Refinery
Mr Zacch Adedeji, Chairman, Federal Inland Revenue Service (FIRS), said this while briefingState House correspondents at the end of the Federal Executive Council (FEC) meeting on Monday, July 29, 2024.
He said NEC approved that sale of petroleum products to approved local petroleum marketing companies be conducted in naira at the same fixed exchange rate.
The proposal also includes a settlement bank (Afreximbank) facilitating both trades by providing guarantees to NNPCL to cover the payment risk of local refineries and to Nigerian commercial banks for the payment risk of petroleum marketing companies.
“This approach will eliminate the need for international letters of credit, saving Nigeria substantial amounts of dollars,” he said.
Adedeji said the refinery sector was approaching a steady state of operations and required approximately 15 crude cargoes per month, translating to an annual supply cost of $13.5 billion.
“NNPC Limited (NNPCL) has committed to supplying four crude oil cargoes monthly, leaving the remainder to be sourced from international traders.
“Currently, these transactions are conducted in dollars, significantly straining Nigeria’s foreign currency liquidity,” he said.
He explained that strategic intervention was required to leverage the Dangote Refinery to stabilise the naira and restore price stability.
“To manage the significant foreign exchange (FX) needs for local refineries and petroleum marketers, it is proposed that local refineries’ crude oil purchases from NNPCL be denominated in naira at a fixed exchange rate for a minimum period of six months,” Adedji said.
According to him, the benefits of the proposal include reduction in foreign exchange pressure, as the previous scenario utilised $660 million per month, totaling $7.92 billion annually.
“With the proposed scenario, expenditures are projected to decrease to $50 million per month, equating to $600 million annually.
“This reduction will significantly alleviate the pressure on foreign exchange reserves, leading to an annual savings of $7.32 billion representing 94 per cent,” he said.
Adedeji said there would be reduced trade finance costs with annual savings of $79 million in Letters of Credit costs through Afreximbank’s payment undertakings for bilateral trades.
“The benefits include stabilised petroleum product prices as the forward-selling of crude oil and refined products at a fixed exchange rate unaffected by exchange rate fluctuations will stabilise pump prices.
“Stabilising petroleum prices will likely drive the appreciation of the NGN, as petroleum imports account for 30 per cent of Nigeria’s FX demand.
“Stable petroleum prices will lower transportation costs, reducing food price inflation and positively impacting interest rates and dollar/naira exchange rates,” he said.
According to Adedji, this strategy will eliminate government control and drive independence of the market as it aims to eliminate government intervention in the management of domestic petroleum prices.
He said it would further facilitate competitiveness and allow greater market predictability and stability.
“This model, subject to the settlement bank’s (e.g., Afreximbank) credit approvals, can be replicated for other refineries, facilitating the trade of 445,000 barrels reserved for domestic consumption and achieving energy security.
“This further ensures that strategic reserves are pegged at tolerable prices driving improved economic stability,” Adedeji said.
