The Nigerian National Petroleum Corporation is relocating its oil trading subsidiary to Dubai from London, United Kingdom, according to Reuters.
Four sources revealed that the change of territory is driven by a need to get closer to its main buyers in Asia.
The move was also brought on by the intent to cut down on taxes.
Duke Oil Services, the London arm of the Panamanian registered firm, said in a filing made to the UK’s company house that it would wind down operations in the second quarter of 2019 and move to an unspecified location.
The fully owned NNPC subsidiary, which was established in the 1980s to help sell Nigeria’s petroleum, had been based in London’s Hammersmith neighbourhood, which houses NNPC’s UK office as well.
The choice of Dubai comes as the United States began pumping 12m barrels of oil per day, claiming Nigeria’s markets in Europe and competing with the West African producer in Asia as well.
While the US spent six years developing the capacity to produce at the same level with Saudi Arabia, Nigeria has for a long time hovered around the 1.7 to 2m barrels per day threshold.
The country has also failed to add to its reserves within the same period the US took over its market share and stopped importing from the country.
According to Reuters, India is Nigeria’s new bride and Asian refineries are buying Nigeria’s oil and swapping it for the much needed petrol the country’s refineries are unable to produce.
The Americans will see attack on Saudi oil as an attack on them
Its size and production capacity makes it a critical part of the global oil supply industry.
It’s not yet clear how much damage was caused to the two plants or for how long production will be impacted, but the Saudi oil minister confirmed overnight a temporary loss of 5.7 million barrels per day of production because of the attacks.
For context, Saudi Arabia pumped 9.8 million barrels per day in August.
The Abqaiq plant was the target of a failed al Qaeda attack in 2006. Since then it has been heavily fortified but is still vulnerable from the air, especially from drones which can bypass air defence systems.
In terms of the impact on the global market and oil supply: well, short term there may be a problem which will become clear when the markets open on Monday morning.
But longer term the gap will probably be bridged by increasing production elsewhere and by releasing reserves into the market.
The much bigger concern now is the geopolitical fallout and the consequence for regional security.
The US government is in no doubt that the Saudi drone attacks were the work of Iran.
The operation was claimed by the Yemeni Houthi rebel group but they are known to get weapons and technology from their main backer, Iran, who are suspected by other nations to use relatively low-tech ‘attack drones’ as weapons.
With cheap new technologies, small attack or ‘kamikaze’ drones are proving to be disproportionately effective when successful.
Two weeks ago, Israel carried out what they said was a preemptive strike on fighters they said were linked to Iran’s elite Quds Force who were preparing to launch a drone from Syria (where Iran now has a strong foothold) to attack Israel.
US Secretary of State Mike Pompeo said Tehran had launched an “unprecedented attack on the world’s oil supply”, adding that there was “no evidence that the drones were launched from Yemen”.
It’s true that, geographically, the two oil refineries are closer to Iran and Iraq (where Iran has a foothold) than to Yemen.
The Americans have always blamed Iran for stoking the flames of the Yemen conflict. But the drone attack represents, in US government eyes, an attack on global energy supply which they’ll interpret as an attack on them.
“We call on all nations to publicly and unequivocally condemn Iran’s attacks,” Mr Pompeo tweeted. “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
In such a chaotic and delicate region, an attack of this type is very dangerous.
Donald Trump has been hoping to meet Iranian President Hassan Rouhani in his latest attempt at rapprochement (after limited success with North Korea’s Kim Jong Un and no success with Afghanistan’s Taliban).
Last week he fired his national security adviser John Bolton who was calling for a much harder line on Iran.
While Mr Bolton sits out of office no doubt saying “I told you so”, President Trump must now be pondering the merits of the proposed meeting with the Iranian president.
His own secretary of state seems clear: “Tehran is behind nearly 100 attacks on Saudi Arabia while Rouhani and Zarif pretend to engage in diplomacy…”
Vat Increase: Businesses In Lagos To Pay 12.2 Per Cent On Goods, Services
Businesses in Lagos will pay 12.2 per cent on the sale of goods and services once the 7.2 per cent Value Added Tax increase comes into force.
An analyst with Afrinvest, Adedayo Bakare, pointed this to SaharaReporters on Wednesday during a chat.
The Lagos State Government had since collected tax from restaurants and other retailers under a sales tax law despite a Supreme Court ruling against such in September 2018.
Bakare while speaking with SaharaReporters, said, “In Lagos, consumption tax is already 10 per cent because Lagos State charges five per cent VAT and there is also another consumption tax of five per cent.
“So, for Lagos State, automatically, consumption tax is 12.2 per cent.”
Citing the data on VAT collection given by Nigeria’s former Finance Minister, Kemi Adeosun, in 2018, Bakare said only about four states were generating most of the VAT, adding that the tax burden on just a few is disproportionate.
“Meanwhile, when they generate all these money, they will share it between 36 states when most of the money is generated in just four states.”
While admitting that the hike in VAT was not wrong, Bakare said there was a more urgent need to keep widening the tax net.
He added, “It is important that they widen the tax net to bring more informal businesses to the formal sector.”
FG reveals what banks will do to accounts of tax defaulters
The FIRS Executive Chairman, Tunde Fowler, dropped the hint on Thursday when he appeared as a guest on the Nigerian Television Authority (NTA) programme – Platform.
He said that banks have been instructed to “sweep the accounts of tax defaulters into the Federation Account after 30 days.”
According to Fowler, bank accounts of the identified defaulters have been put on lien.
The FIRS boss noted that since the bank lien on tax defaulters’ accounts was initiated 60 days ago, the Service has granted an additional 30 days – making it 90 days – for the defaulters to regularise their tax status.
He said the FIRS has written 23,000 letters to high-profile tax defaulters, whose names appeared on its list of defaulters.
Some of the letters, he said, have not been delivered because the addresses of the defaulters may have changed.
“The FIRS is determined because the Service is backed by law to sweep the equivalent of what such tax defaulters owe into the federation account.
“At the end of the 90 days, banks will be asked to sweep the tax owed into the Federation Account,” he warned.
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