Business

Four more UK energy suppliers go bust amid high gas prices

Another four energy suppliers have gone bust in a single day as historic gas market highs continue to rip through the UK’s energy market amid fresh fears that Russia may curb gas supplies to Europe.

The energy regulator, Ofgem, said the collapse of four small energy suppliers on Tuesday would leave about 24,000 households in need of a new supplier, and bring the total number of bust energy companies to 17 since the start of September, affecting more than 2 million households.

The flurry of failures follows rocketing global energy market prices due to a sudden surge in demand for gas as economies began to shrug off restrictions related to the Covid-19 pandemic. Gas markets have reached record highs in recent weeks, leading to one of the sharpest increases in home energy bills and fears of a cost-of-living crisis this winter.

Out of the four UK casualties Zebra Power had the largest customer base, and supplied 14,800 households with energy. Omni Energy supplied about 6,000 domestic pre-payment customers, while AmpowerUK had about 600 UK customers and supplied a further 2,000 overseas households. MA Energy had about 300 overseas customers.

Scores more energy suppliers are expected to collapse in the months ahead as gas markets remain at near-record highs, and suppliers are forced to shoulder the higher costs without raising their tariffs above the regulator’s energy price cap.

Consumer charity Citizens Advice said struggling households would ultimately pay the price “with uncertainty, inconvenience and ultimately higher bills” as suppliers continue “to fall like dominoes”.

Gillian Cooper, the head of energy at Citizens Advice, said: “Last week, Ofgem set out how it intends to ‘raise the bar’ for supplier standards and improve their resilience in the short term. This is a positive step, but it’s clear that existing rules and their enforcement, has not been enough.”

Cooper added: “Longer-term, Ofgem will need to do more to make sure companies are financially sound and provide good customer service. This should include protecting people from the loyalty penalty, which prior to the cap allowed companies to profit from those who didn’t or couldn’t switch.”

The energy regulator set out plans for “bold action” last week to fasttrack changes to its price cap, which protects around 15 million households from unfair energy bills, following growing calls from suppliers to make the cap more flexible so that market increases can be passed on to households sooner.

The price cap overhaul has emerged amid deepening concerns that gas prices, which are more than three times higher than this time last year, may resume their upward climb as temperatures plunge across Europe and Russia squeezes gas exports to Europe.

Gas flows from Russia’s state-owned gas giant Gazprom, which supplies about a third of Europe’s gas, dropped significantly over the weekend and on Tuesday the company declined to offer extra gas supplies to Europe from January, when demand is often at its highest for the winter.

The slowdown in gas exports has reignited fears over the winter’s energy suppliers despite a direct order from the Russian president, Vladimir Putin, for Gazprom to focus on filling its European gas storage facilities from 8 November, when Russian domestic storage should be filled.

Russia’s decision not to open its gas taps to allow extra supplies into Europe from January also defies calls from the global energy watchdog, the International Energy Agency, which said last month that Russia should help to ease market prices by boosting gas exports to Europe this winter.

Moscow has denied it is withholding gas supplies from Europe via its pipelines through Ukraine and Poland to exert pressure on German regulators to approve gas shipments through the new Nord Stream 2 pipeline across the Baltic Sea to Germany.

But its decision to send only contracted volumes despite the strong demand for extra gas supplies is likely to raise gas market prices across Europe, helping Russia to charge more for its hydrocarbon exports.

Business

Ponzi: SEC warns Nigerians against doing business with Forsman and Bodenfors over ‘fraudulent’ activities

The Securities and Exchange Commission (SEC) has warned Nigerians about the activities of Forsman & Bodenfors Limited, also known as F&B.

In a statement on Monday, the SEC said the entity is fraudulent and operates with criminal intent.

The commission said the promoters of the firm claim to be operating as the Nigerian branch of a Swedish advertising company with a similar name.

“The attention of the Securities and Exchange Commission (The Commission) has been drawn to the activities of FORSMAN & BODENFORS LTD also known as F&B, which is paraded by its promoters as the Nigerian Branch of a Swedish advertising company bearing that name with obvious criminal intent,” the statement reads.

“The promoters of this fraudulent Nigerian entity go about promising Nigerians automatic employment in the company as compensation for recruiting more members who are lured to pay various sums of money for various positions in the company.

“Preliminary investigations reveal that FORSMAN & BODENFORS LTD has been actively promoted on social media platforms and online forums. Its operations exhibit the typical indicators of a fraudulent (Ponzi) scheme.

“The Commission hereby informs the public that FORSMAN & BODENFORS LTD is NOT REGISTERED by the Commission nor authorized to solicit funds from the public or to operate in any capacity in the Nigerian capital market.

”The SEC urged the public to avoid engaging with the firm or its representatives concerning activities in the Nigerian capital market, warning that there is a potential risk of financial loss due to the fraudulent nature of its promoters.

Business

NNPC refineries may never work again – Dangote

The President of Dangote Group, Alhaji Aliko Dangote, has stated that Nigeria’s state-owned refineries in Port Harcourt, Warri, and Kaduna may never function properly again, despite the reported $18 billion spent on their rehabilitation.

Speaking while hosting members of Global CEO Africa at the Dangote Petroleum Refinery, Dangote revealed that his decision to construct the 650,000-barrel-per-day facility followed the late President Umar Musa Yar’Adua’s administration’s refusal to sell the refineries to him.

According to Dangote, he and other investors had acquired the refineries in January 2007 but were compelled to return them to government ownership after a change in administration. He observed that despite significant subsequent investment, the refineries have remained inoperative.

“The refineries we bought before, which were owned by Nigeria, were producing about 22 per cent of PMS. We bought them in January 2007 but had to return them due to a change in government. The managing director at that time convinced Yar’Adua that the refineries would work,” he said.

“As of today, they have spent about $18 billion on those refineries, and they are still not working. I doubt very much if they will ever work,” he added.

Dangote likened the rehabilitation efforts to attempting to upgrade a 40-year-old car with modern technology, suggesting that even a new engine would not be compatible with the outdated framework.

Former President Olusegun Obasanjo had earlier expressed similar misgivings. In a previous interview, he asserted that the NNPC knew it was incapable of effectively operating the refineries but actively blocked private sector involvement.

Obasanjo disclosed that Dangote and other investors had paid $750 million to acquire the refineries, only for the deal to be reversed by the Yar’Adua administration.

“I told Yar’Adua the refineries would not work. I said, ‘NNPC cannot do it.’ He said, ‘NNPC said they can.’ I told him, ‘When you want to sell them again, you won’t find anyone willing to pay even $200 million as scrap.’ And that is where we are today,” Obasanjo said.

He alleged that the failure to privatise the refineries was fuelled by entrenched corruption within the NNPC, and insisted that those responsible should be held accountable.

Obasanjo further claimed that over $2 billion had been spent on the refineries in recent years, with no tangible results.

“If anyone says the refineries are working, why are they now relying on Aliko Dangote? He will make his refinery work and deliver,” he said.

Business

Nigerian stock market hits historic N1.806trn gains

The Nigerian Stock Exchange, under Nigerian Exchange Group, NGX, Limited, recorded a historic milestone as investors gained N1.806 trillion in a single day.

This development follows a significant rise in the All-Share Index, ASI, which surged by 2,457.13 points, or 2.01 per cent, to close at 124,446.80, crossing the 124,000 mark for the first time, from its previous close of 121,989.67.

The market’s positive performance has been attributed to growing investor confidence in Nigeria’s equities market, bolstered by improved liquidity conditions and ongoing economic reforms.

Market capitalisation similarly rose by 2.35 per cent to settle at N78.726 trillion on Thursday, up from N76.970 trillion recorded on Wednesday.

Consequently, market breadth closed strongly positive, with 70 gainers and only 10 losers.

On the gainers’ table, FTN Cocoa rose by 10 per cent to end the session at N6.82, while UPDC also gained 10 per cent, closing at N4.62 per share.

United Bank for Africa, UBA, soared by 10 per cent to settle at N39.60, while Consolidated Hallmark Holdings similarly rose by 10 per cent to close at N3.30 per share.

Haldane McCall also gained 10 per cent, ending the session at N4.73 per share.

Conversely, Neimeth International Pharmaceutical declined by 9.91 per cent, finishing at N9, while Legend Internet shed 9.88 per cent to settle at N7.21 per share.

Industrial and Medical Gases dropped by 7.36 per cent to close at N34, and Cadbury Nigeria fell by 6.22 per cent, ending the day at N55 per share.

Similarly, Livestock Feeds lost 5.67 per cent, closing at N9.15 per share.

In terms of market activity, 1.3 billion shares valued at N27.73 billion were exchanged across 27,875 transactions.

This compares to 888.70 million shares worth N15.609 billion traded in 24,303 transactions on Wednesday.

Leading the activity chart was Access Corporation, with 174.22 million shares valued at N3.99 billion.

AIICO Insurance followed with 81.96 million shares worth N165 million, while Ja Paul Gold recorded 74.01 million shares traded, valued at N245.2 million.

UBA exchanged 64.51 million shares worth N2.52 billion, and First City Monument Bank traded 63.3 million shares valued at N585.75 million.