Business

UK industry could face shutdowns as wholesale gas price hits record high

UK industry could face shutdowns as wholesale gas price hits record high

Wholesale gas prices hit new all-time highs on Wednesday, prompting warnings that factories could be forced to shut down over winter or switch to more polluting fuels just as the UK hosts the Cop26 climate conference next month.

The crisis has already forced a wave of collapses among energy suppliers that has led to warnings of “desperate choices” for households likely to face higher bills as a result.

As power-hungry sectors such as steel, glass and chemicals fight their own battle with soaring gas and electricity costs, they warned of further shocks to both industry and consumers, including higher prices of goods and factories being forced to temporarily close.

Growing concern about the domino effect of high energy prices came as the cost of gas for delivery the next day reached 350p per therm on Wednesday, while gas for delivery in November reached 407p, both new records. Prices fell back later, after Russia’s president, Vladimir Putin, indicated that the country, the largest supplier of gas into Europe, was prepared to help ease the crisis.

But leading figures from energy-intensive industries said serious ramifications were already on the cards unless the government heeded their call for measures to reduce energy costs.

Trade body UK Steel said it was now “uneconomic” to make steel at certain times in the UK, with British firms facing double the electricity prices paid by rivals in Germany, France and the Netherlands. British Steel, based in Scunthorpe, has begun adding surcharges of up to £30 a tonne to its products to recoup higher energy costs, increasing costs for customers in the construction and automotive sectors.

David Bailey, a professor of business economics at Birmingham Business School, said consumers could end up feeling the pinch if steel remained expensive. “They’ll pass it on to consumers ultimately, so it could increase the price of cars,” he said.

Network Rail, which owns Britain’s 20,000 miles of railway and buys about 97% of its track from British Steel, said it had yet to see an increase in prices.

With just weeks to go until the UK hosts the Cop26 global climate conference, leaders in the glass and minerals industries said high gas prices could ultimately lead to increased pollution.

Richard Stansfield, the chief executive of the lime manufacturer Singleton Birch, said the increased cost of production was being passed on to consumers, including water companies and firms that use the mineral to turn waste into energy.

“We could get into a ridiculous situation where it’s cheaper to put waste into landfill than to put it into waste-to-energy plants,” he said. “There are all sorts of knock-on effects.”

Paul Pearcy, the federation coordinator at the trade body British Glass, said companies that make windows could be forced to revert to powering their furnaces with polluting fuels that had been abandoned.

“Some of our members still have heavy fuel oil on site, having moved over to gas,” he said. “Some of them are seriously considering moving back to that because of the price of gas.

“As prices go the way they are, it becomes more and more financially attractive but with Cop26 around the corner, it’s not a great advert.”

Glass companies and steelmakers run their furnaces continuously, making it extremely difficult, time-consuming and costly to shut down.

Jon Flitney, of the British Ceramic Confederation, said the same was true of its members’ kilns, meaning any decision to scale back operation would “not be taken lightly”.

However, he said that if prices remain high, “the balance between income and operating costs may shift”.

The glass, steel and minerals industries are all members of the Energy Intensive Users Group trade body, which warned of shutdowns in essential industries without help from the government and the energy regulator, Ofgem.

Richard Leese, the chairman of the group, said: “We have already seen the impact of the truly astronomical increases in energy costs on production in the fertiliser and steel sectors.

“Nobody wants to see a repeat in other industries this winter given that UK energy-intensive industries produce so many essential domestic and industrial products and are intrinsically linked with many supply chains.”

The group has called for exemptions for energy-intensive industries from measures designed to help fund renewable energy and penalise carbon emissions.

Any slowdown in work schedules could place a further drag on the economy, adding to concern in sectors such as construction, where shortages of materials and staff drove growth expectations to an eight-month low, according to survey figures released on Wednesday.

Spiking gas prices have already taken their toll on British business, forcing fertiliser plants to shut down and capsizing 12 energy suppliers. A 13th, Omni Energy, warned its customers on Wednesday that it could cease trading in November.

The energy adviser Cornwall Insights said it expected the effect to drive up household energy bills into 2023, by driving the government-imposed cap on energy prices higher.

It expects the energy price cap, currently set at £1,277 for an average dual fuel customer paying by direct debit, to reach £1,659 for summer 2022 and £1,663 for next winter.

The business department said: “We are determined to secure a competitive future for our energy-intensive industries and in recent years have provided them with extensive support, including more than £2bn to help with the costs of energy and to protect jobs.

“Our exposure to volatile global gas prices underscores the importance of our plan to build a strong, home-grown renewable energy sector to further reduce our reliance on fossil fuels.”

Business

FG Gives Approval For Marketers To Lift Fuel From Dangote Refinery

The Federal Government has given approval for marketers to begin the lifting of premium motor spirit commonly known as fuel from the Dangote Refinery without going through the Nigerian National Petroleum Company Limited (NNPCL).

According to a Friday statement by the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, the move followed a directive from the Federal Executive Council (FEC) and the implementation of the new naira-based sales mechanism.

“New Direct Purchase Model: The most significant change under the new regime is that petroleum product marketers can now purchase PMS directly from local refineries,” the minister who chairs the Implementation Committee on the Sales of Crude Oil and Refined Products in Naira said.

“This marks a departure from the previous arrangement where the Nigerian National Petroleum Corporation (NNPCL) served as the sole purchaser and distributor of PMS from the refineries.

“This direct purchasing mechanism allows marketers to negotiate commercial terms directly with the refineries, fostering a more competitive market environment and enabling a smoother supply chain for petroleum products.

“Local Production of PMS: With the commencement of local PMS production, the market is better equipped to support these direct transactions. This transition is expected to enhance efficiency in product availability and stabilize market conditions for the benefit of all Nigerians.

“The Committee recognizes that there are questions and discussions regarding this change in the market structure. We are committed to providing clarity on this development and will continue to engage with stakeholders to ensure a seamless transition process.”

Business

FIRS launches USSD code *829# for taxpayers’ satisfaction

In a bid to enhance ease of doing business, the Federal Inland Revenue Service (FIRS), on Wednesday, launched an Unstructured Supplementary Service Data (USSD) Code *829# specifically targetted at improving taxpayers’ satisfaction.

FIRS chairman, Zacch Adedeji, launched the code at the Revenue House in Abuja as part of activities making this year’s Customer Service Week which has the theme Above and Beyond.

The initiative makes Nigeria the sixth African country to deploy USSD code for simplifying tax payment processes. .

A statement by Dare Adekanmbi, Special Adviser on Media to the FIRS chairman said taxpayers on any mobile telecommunication network in the country can now get across to FIRS real-time on issues relating to retrieval of Taxpayers Identification Number (TIN), verification of Tax Clearance Certificate (TCC), information on tax types and rates, locate the nearest FIRS office, and as well as get answers to general tax-related inquiries.

Speaking at the ceremony, Adedeji said the instant messaging protocol demonstrated further commitment of the agency to simplifying tax administration and ensuring that “every taxpayer—whether in bustling cities or remote areas—can engage with FIRS seamlessly.”

He called on taxpayers to enjoy the benefits that the USSD code offers and utilise the code for all their enquiries.

“With the *829# USSD code, taxpayers now have the power to: retrieve their Taxpayer Identification Number (TIN), verify their Tax Clearance Certificate (TCC), access information on tax types and rates, locate the nearest FIRS office, and get answers to general tax-related inquiries.

“Without the need for internet access, all of these services are now available with a simple mobile phone. This technological leap reflects our dedication to creating a tax system that is efficient, transparent, and responsive to the needs of taxpayers”, he said.

The agency also launched Customer Centricity Guide, a booklet containing policies, processes and procedures to ensure that FIRS keeps the taxpayers in their rightful position as ‘kings.’

“Equally important is the unveiling of the Customer Centricity Guide. This guide embodies our commitment to putting taxpayers at the centre of our service delivery.

“It outlines the principles and values that will drive our interactions with taxpayers by ensuring that every engagement is defined by respect, professionalism, and efficiency.

“The guide serves as a reminder to us all that the taxpayer is not just a client, but a valued partner in nation-building. Through the combination of the *829# USSD code and the Customer Centricity Guide, we are reinforcing a culture of service excellence and making tax compliance not just a duty but an experience that fosters trust and voluntary participation.

“As we celebrate this achievement, I encourage everyone to make full use of the *829# service and embrace the Customer Centricity Guide. Your feedback will be crucial as we continue to enhance these services and meet the evolving needs of our taxpayers,” he said.

The national coordinator of Servicom, Nnenna Akajemeli, praised the effort of the FIRS towards taxpayers’ satisfaction, noting that the efforts are evident.

“There are many things to congratulate the FIRS on. One is the launch of the USSD code *829# and the customer centricity guide. These initiatives which are simplifying tax and ensuring that citizens and taxpayers are delighted at the quality of service you render,” she said.

FIRS Director, Taxpayers’ Service Department, Loveth Onanuga noted the agency recognized that customer-centricity means more than just satisfying customers’ basic wants, but also going “above and beyond what customers anticipate and astonishing them with great service” in line with the theme of the week.

Business

NACCIMA raises concerns over hike in petrol prices

The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has expressed concern over the increase in petrol pump prices in Lagos and Abuja.

Mr Dele Oye, National President, NACCIMA, made this known in a statement on Wednesday in Lagos.

Oye said that the prices, which had reached N998 and N1,030 per litre respectively, were placing a strain on businesses and households across the country.

He spoke on the potential economic consequences of the price hike, warning that the increase could lead to higher transportation costs, exacerbate inflation and severely impact small and medium-sized businesses.

He said that the decision, influenced by several underlying factors, warranted careful examination of its potential repercussions on the economy, particularly in the realms of pricing for goods, services and transportation.

“With transportation costs directly tied to fuel prices, this increase will serve as a catalyst for higher freight charges.

“Given that fuel is a primary driver of inflation, the rise in petrol prices will exacerbate the already high inflation rate in Nigeria.

“Households will find themselves paying more not only for fuel, but also for everyday goods and services, prompting a vicious cycle of rising costs and economic hardship.

“The recent fuel price increase will have a profound impact on micro and nano businesses, many of which rely heavily on petrol generators to power their operations,” he noted.

According to him, the overall economic landscape for SMEs can shift from potential growth to survival.

He explained that this would not only impact individual enterprises, but also limit job creation and economic development in communities across Nigeria. explained.

The NACCIMA president called on the Nigerian National Petroleum Corporation Ltd. (NNPCL) to demonstrate the necessary goodwill to support Dangote refinery operations.

This, he said, would ideally stabilise local petrol prices, reduce Nigeria’s dependence on imported petrol and contribute to national self-sufficiency.

Oye also called on the Central Bank of Nigeria to be more effective in implementing monetary policies that stabilise or strengthen the Naira

He noted that as importation costs rise due to currency depreciation, domestic fuel prices would likely continue on an upward trajectory.

“It is imperative that we advocate for robust strategies that not only stabilise fuel prices but also bolster domestic production capabilities, ensuring that the Nigerian economy can navigate these turbulent times more effectively.

“As stakeholders, NACCIMA will continue to engage with government entities to encourage a more conducive climate for growth and sustainability,” he said.