Business

Steel industry calls for state support to avoid ‘full blown crisis’

The steel industry has called for urgent state support to avoid a “full blown steel crisis”, warning that plans to issue loans to soften the impact of soaring gas prices “won’t address the problem”.

As industry leaders voiced dismay at the perceived lack of support from government, trade unions wrote to the prime minister warning he was at risk of making a “historic mistake with devastating consequences” for an industry employing 32,000 people.

Uncertainty about how to support power-hungry industries such as steel has already sparked a political row between the Treasury and the business secretary, Kwasi Kwarteng, over whether to offer financial support.

While the Treasury is understood to be reluctant to fund a bailout, ministers are weighing up proposals from Kwarteng to provide short-term loans or guarantees while gas prices are high, to help sectors such as steel, glass, chemicals and paper.

Representatives from the industry met officials from BEIS on Tuesday but left disappointed at a lack of detail on the proposals and concerned that the loan plan won’t help.

“If it is only these loans that are on the table, then for the steel industry that won’t address the problem,” UK Steel’s director, Gareth Stace, told the Guardian.

“We need to get back round that table to discuss and agree better solutions.”

Three steelworkers’ unions – Community, the GMB and Unite wrote to the prime minister on Tuesday, urging action to protect thousands of jobs.

“The seriousness of the situation requires swift and decisive action from government. But it seems government ministers have been too busy squabbling, and that’s why we wrote to the prime minister urging him to get a grip and act to resolve this crisis before it is too late.”

In their letter to the prime minister, the steelworkers’ unions said other European countries had provided assistance to their own steelmakers.

“Brexit was supposed to make it easier for the government to back British industry and British jobs, but all we are seeing is the same old procrastination and excuses for doing nothing,” they wrote.

UK Steel had earlier backed Kwarteng in calling for assistance from the chancellor, Rishi Sunak. The Treasury initially appeared to reject, issuing an unusual reprimand to the business secretary for suggesting help might be available.

Since the split, officials from the departments are understood to have thrashed out the short-term lending plan.

But UK Steel said this would leave the industry still battling against a “hostile environment” and at risk of shutdowns.

In an earlier statement, Stace said: “Our message directly to the prime minister is please don’t just apply a sticking plaster to what is a significant long-term problem. Action can and must be taken now to secure the foundations of British industry.”

Kwarteng met representatives from industries including steel, paper, glass and chemicals on Friday and again on Monday, to hear their arguments for longer-term help, such as measures to ease electricity costs, which are high relative to European peers.

Stace said any measures to help steel had to put UK producers on a “level playing field” with overseas rivals.

“If any package delivers less than this and we still continue to pay more for energy than French and German steel producers and we remain at a competitive disadvantage,” he said.

“Steel producers here in the UK will continue to have to pause steel production, will be less efficient and will lose margins and market share.

“This is a hostile environment for industrial investment in the UK and for the government’s levelling-up agenda.”

The business department said the steel industry’s international competitors were often benefiting from pricing regimes that transferred the cost of industrial energy usage onto households.

“Ministers and officials continue to engage constructively with industry to further understand and to help mitigate the impacts of high global gas prices,” said a spokesperson.

“Our priority is to ensure costs are managed and supplies of energy are maintained.

“Some countries on the continent have lower industrial electricity prices in part because some costs are recovered from consumer bills.”

Business

CAC threatens to shut down PoS operators as deadline for registration expires

The Corporate Affairs Commission has said it will work with law enforcement agencies and other legal means to shut down recalcitrant Sales Operators who fail to register their businesses as its 60-day deadline lapses.

The Commission disclosed this in a notice Friday on its official X handle.

This comes after CAC on July 7, 2024, issued a 60-day deadline which expired on Thursday, September 5, 2024, for all PoS operators to register their businesses.

CAC noted that there was inadequate compliance with its directive, noting that those who decided not to register may be engaging in unwholesome activities.

“The Commission notes inadequate compliance with the directive for formalization when viewed from the background of the large number of POS operators in the country. Those who have taken steps to formalize in line with the Commission’s directive are commended for their positive attitudes.

“Recalcitrant operators have refused to adhere to the advice for formalization due possibly to engagements in unwholesome activities or for some reasons best known to them.

“We are here to make it clear that the Commission is working with Law Enforcement Agencies and other relevant stakeholders to deploy a comprehensive enforcement and sanction framework that may include not only possible shutdown but other severe legal Consequences.”

Meanwhile, the Association of Mobile Money and Bank Agents in Nigeria, AMMBAN, recently challenged the CAC’s registration directive.

Business

Dangote’s petrol to flood market from Sept 15 — NNPCL

The Nigerian National Petroleum Company Limited (NNPCL) has announced that Premium Motor Spirit (PMS), commonly known as petrol, from the Dangote Refinery will begin to flood the market starting on September 15, 2024.

This development follows the refinery’s commencement of petrol refining earlier in the week.

In a statement signed by the NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, on Thursday in Abuja, the company clarified that petrol prices would now be determined by market forces.

The statement addressed speculations about price control, reiterating that the downstream sector had been fully deregulated and that NNPCL would no longer fix fuel prices.

Adedapo Segun, NNPCL’s Executive Vice President of Downstream, emphasised that foreign exchange (forex) illiquidity had been a major factor influencing PMS price fluctuations, which are now regulated by the free market as mandated by the Petroleum Industry Act (PIA).

Segun also noted that the current fuel scarcity should ease within a few days as more filling stations recalibrate their systems and resume selling PMS.

He cited Section 205 of the PIA, which established that petroleum prices are governed by market forces rather than government intervention. The exchange rate, he added, significantly impacts fuel prices.

Regarding the supply of petrol from the Dangote Refinery, Segun stated that NNPCL was preparing for the September 15 timeline when products would be available for distribution.

He assured Nigerians that NNPCL is working closely with fuel marketers to ensure stations remain open and well-stocked to meet demand, while measures are being taken to prevent product diversions.

Segun’s comments come on the heels of the Federal Government’s announcement of an impending boost in petrol supply over the weekend, as vessels had started offloading while reaffirming that PMS prices would not be fixed by the government.

Business

PMS Prices are determined by free market forces—NNPC Ltd

The Nigerian National Petroleum Company Limited (NNPC Ltd.) has stated that foreign exchange (forex) illiquidity has been a significant factor influencing the fluctuation in prices of Premium Motor Spirit (PMS), which are governed by unrestricted free market forces, as provided for in the Petroleum Industry Act (PIA), 2021.

Speaking on TVC News’ “Journalists’ Hangout” show on Thursday, the Executive Vice President of Downstream, NNPC Ltd., Mr. Adedapo Segun explained that the current fuel scarcity was expected to “subside in a few days as more stations recalibrate and begin selling PMS.”

He said Section 205 of the PIA, which established NNPC Ltd., stipulated that petroleum prices were determined by unrestricted free market forces.

According to him, “The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices.”

On the commencement of lifting PMS from the Dangote Refinery, Segun said that the NNPC Ltd. was awaiting the September 15th timeline provided by the Refinery.

Segun, who said no right-thinking individual would be comfortable with the current fuel scarcity, added that the NNPC Ltd. has nearly a thousand filling stations nationwide and was collaborating with marketers to “ensure that stations open early, close late, in order to maintain adequate fuel supply to meet the needs of Nigerians.”

He assured Nigerians: “We are also engaging relevant authorities to ensure products diversions are prevented and timely deliveries to all stations are ensured. The scarcity should ease in the next few days as more stations recalibrate and begin operations.”