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Price Rout Affects Oil Industry Mass Sack, Investment Cut

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The foreign and local oil firms, yesterday, perfected plans for mass disengagement of workers and slash in investments as parts of measures to mitigate the effects of price rout rocking the global market.

The rout, buoyed by spread of Coronavirus and the price war between Saudi Arabia and Russia, crashed the price of oil to as low as $30 per barrel on Monday and it had, according to checks by this newspaper, became a major threat to the oil multinationals’ multi-billion dollars businesses in Nigeria and across the World.

The firms, a source at the Ministry of Petroleum Resources told New Telegraph, have already opened talks with the Nigerian National Petroleum Corporation (NNPC) – their major shareholder – on measures they have in place to reduce the effect of the oil price rout, which is expected to be far-reaching if not addressed.

“Everyone knows that there is a looming danger to oil investments across the world and Nigeria is not an exception. And, everyone who wants to remain in business will downsize in terms of staff strength and investments cut to stay afloat.

“They (oil firms) have, as a matter of fact, opened discussions with the government through the NNPC on their plan, which included the two I mentioned earlier – slash of staff strength and of investments with marginal profit margin or low return on investment (RoI),” he said.

These plans, which he said would affect non-core staff particularly those at the supporting service units and the contract workers, will definitely happen. “It is just a matter of time after approval of the proposal is granted,” one of the sources said.

The NNPC, in the same vein, is billed to implement a major shake-up today at its management level.

The Corporation had, on Wednesday, expressed its readiness to strategically put in place measures that will alleviate the cost of crude oil production in Nigeria to create market for Nigeria’s crude and make Nigeria a choice destination for Foreign Direct Investment (FDI).

The Group Managing Director of the NNPC, Mele Kyari, made this known at the Central Bank of Nigeria (CBN) Roundtable discussion in Abuja yesterday.

Kyari stated that at the moment, the cost of crude oil production in the country was within the range of $15 to $17 per barrel, adding that some leaders in the Industry, such as Saudi Arabia’s cost of production is between $4 and $5 per barrel.

He noted that due to the uncertainties of the global crude oil market, countries that produce at the cheapest price would remain in the market, while jurisdiction with high cost of crude oil production would not be able to cope with the competing prices.

He noted that due to the Coronavirus pandemic, Nigeria has about 50 cargoes of crude oil that have not found landing, adding that this implies that there are no off-takers for them for now due to the drop in demand.

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Few Days To Sallah 2021: See The Prices Of Rams At A Local Market In Nigeria (Pics)

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I visited a local Ram market at Ile-Ife town in Osun State, South West Nigeria today on the request of a brother to help get ram for his aged mother and I sampled the market by asking for prices of most rams from the buyers.

Average cost of fair rams in size cost between N65,000 to N150,000. Most sellers are reluctant to give prices of most rams, you only point to the one you want and they give you price, especially the Northern sellers (Mallam)

To get a good ram, with good size and meat, one needs at least N100,000.

First & Second Picture are N110,000
The third picture are N65,000.

See the video to see their real sizes and prices of many others.

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Nigerians Will Now Pay N6.98k For Every USSD Transaction Carried Out

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A few days ago, telecom operators withdrew the USSD shortcode service bank from their platform which means customers would have huge challenges in carrying out financial transactions via the USSD platforms.

As of today, Nigerians will now pay N6.98k for every USSD transaction carried out from their mobile phone. The price replaced the former per session billing structure for USSD transactions.

USSD

According to CBN “Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions.

“This resulted in the accumulation of outstanding fees for USSD services rendered leading to potential service withdrawal by the MNOs.” “We are pleased to announce that after comprehensive deliberations on the key issues, a resolution framework acceptable to all parties was agreed thus:

 “Effective March 16, 2021, USSD services for financial transactions conducted at Deposit Money Banks (DMBs) and all CBN – licensed institutions will be charged at a flat fee of N6.98 per transaction. “This replaces the current per session billing structure ensuring a much cheaper average cost for customers to enhance financial inclusion.

 With the latest announcement by the CBN, it appears that the banks and telcos have resolved to put the brunt of the cost on the users contrary to the NCC initial directive.

This means that Nigerians will pay even more than the N4 they were initially complaining about. Starting from today, users of USS D will have to pay N6.98 per transaction.

However, it is still unclear who will collect the charges, banks, or telecommunications.

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Crypto Ban: Northern Senators Support CBN, Southern Senators Oppose

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The recent ban on cryptocurrency transactions via Nigerian bank accounts has divided opinions among Nigerian senators.

The Central Bank had directed deposit money banks and other financial institutions to deactivate all customers’ accounts used for transacting all forms of virtual currencies.

The CBN hinged its decision on claims that fraudulent transactions were being carried out via cryptocurrency dealings, thereby weakening the Naira. It also alleged that the exchange could be used to funnel illicit funding for terrorism and other threats to national security.

Debating the development on Thursday at plenary, Senator Tokunbo Abiru, a former bank chief executive from Lagos, says he does not see the ban as the solution to the highlighted threats but suggested a public hearing be held with stakeholders.

“The last five years, we have had people changing crypto-currencies to over 500 million dollars. It is good to ban because of the challenges it has presented; in reality, banning it doesn’t take it away,”
 Mr. Abiru said.

“Even our Security Exchange Commission (SEC) also recognised crypto-currency as a financial asset they need to regulate. What we should do is to invite the major stakeholders to a public hearing.”

Adding his voice, Senator Solomon Adeola (Lagos West) opined that rather than the outright ban on crypto-currency by the banks regulator, regulation of the market would be a better option.

In his words: “I am strongly against the outright ban of this medium of exchange by the Central Bank of Nigeria(CBN). What the CBN should be telling Nigerians are the regulations put in place to regulate the activities of the operators.”

“All over the world, these cryptocurrencies are regulated. The operators of this so-called currency are everywhere. I would indulge this senate to allow the regulators also to be invited so that they can also tell the committees their own position concerning the operation of cryptocurrency in Nigeria,” Mr. Adeola concluded.

Senator Biodun Olujimi, apparently against the ban, noted that the youth have gained so much from the business of bitcoin, hence, advised the CBN and the government to iron out ways for cryptocurrency to work for the country while also taking step to prevent fraudulent people from gaining access.

Ms. Olujimi said, “We didn’t create cryptocurrency and so we cannot kill it and cannot refuse to ensure it works for us. These children are doing great business with it and they are getting results and Nigeria cannot immune itself from this sort of business.”

“What we can do is to ensure bad people must not use it. This motion is most important to us. The time has come for us to harmonise all the issues concerning cryptocurrency,”
 the senator added.

However, in a swift opposition, Senator Sani Musa (Niger) believes the directive is necessary due to the clandestine nature of the medium of transaction which makes it almost impossible to regulate while seeing it as a threat to Nigeria’s weak economy and the fragile Naira.

“Cryptocurrency has become a worldwide transaction of which you cannot even identify who owns what. The technology is so strong that I don’t see the kind of regulation that we can do. Bitcoin has made our currency almost useless or valueless,”
 Mr. Sani lamented.

In addition, he said: “If we have an economy that is very weak, and cannot regulate cryptocurrency in Nigeria, then I don’t know how our economy would be in the next seven years.”

The senate then mandated its committees on banking, insurance and other financial institutions, ICT and cybercrime, and capital market to invite the CBN governor for briefing on the opportunities and threats of the cryptocurrency on the nation’s economy and security and to report back findings within two weeks.

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