Economy

FG to supply 10% of India crude demands

NNPC saves over $3bn from arbitrations – Kyari
Written by Maritime First

…As Official indicates why Nigeria has not taken advantage of AGOA***

The Nigerian National Petroleum Corporation (NNPC) on Thursday indicated that Nigeria will continue to supply 10 per cent of India’s crude oil demand in the face of competing demand for the product from other countries.

The Group Managing Director, Malam Mele Kyari indicated this in a statement signed by Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, saying Kyari gave the assurance, when the Indian High Commissioner to Nigeria, Abhay Thakur, paid him a courtesy visit to his office in Abuja.

He said that Nigeria, through the corporation, would continue to support India’s energy security.

He added that the recent Memorandum of Understanding in the area of energy between Nigeria and India would be consummated to further strengthen the bilateral relations between the two countries.

He said that NNPC was desirous of growing the energy cooperation with India and that it was time to progress from just talking to walking the talk.

He said India was a very important market and that NNPC would ensure that the current volume of crude oil supply from Nigeria to India was secured for the collective interest of both countries.

“We are ready to have a robust engagement with the Indian trade team to provide a win-win energy scenario between us. Every trade opportunity that is available will be fully explored,” Kyari said, adding that there were lots of untapped investment opportunities in the nation’s Liquefied Petroleum Gas (LPG) and expressed the willingness of NNPC to aggressively improve LPG infrastructure and consumption in the country.

Earlier, Thakur thanked the management of the corporation for the recent renewal of the crude oil term contracts for three Indian companies and sued for increment in the crude oil supply in view of the increasing energy needs of India.

Also read:  No plans to increase petrol price now— NNPC

He said that India was ready to provide credit line mechanisms and expertise to help NNPC revamp its massive infrastructure across the country.

“India is prepared to offer Nigeria and particularly the NNPC a credit line mechanism to help her in the areas of refinery maintenance, construction, security, surveillance and anything possible.

“Our expertise in Information Technology (IT) is available as well.

“We are ready to cooperate with NNPC to boost our bilateral relations,” Thakur said.

The Indian High Commissioner also congratulated Kyari on his appointment as the Group Managing Director of NNPC, noting that the confidence placed in him was well considered for national interest.

In the meantime, a Government official has identified the lack of capacity for mass production, as a major obstacle to Nigeria’s full utilisation of the African Growth and Opportunity Act (AGOA) initiative.

Mr. Babatunde Faleke, the South West Coordinator of Nigerian Export Promotion Council (NEPC), Said this in an interview with newsmen in Abuja on Thursday.

Faleke spoke on the sideline of a one-day sensitisation workshop on “Utilisation of AGOA Visa Stamp” for current and potential garment and apparel exporters to the United States under the scheme.

The AGOA is a legislation of the American government approved by the U.S. Congress in May 2000 aimed at increasing trade between the United States and sub-Saharan Africa.

The Act originally covered the eight-year period from October 2000 to September 2008, but was later extended to 2015 and was later extended by 10 years.

The initiative provides duty-free access to almost 7,000 goods from textiles to agricultural goods to automobile components that countries in the region could export to the U.S.

This has opened the door to large orders by American companies and retailers for goods, especially garment and apparel products  from the African countries.

Faleke said that export to the U.S. under AGOA required a mass production capacity to meet not only demands, but also quality.

According to him, most garment producers in Nigeria are used to customized sewing and small-scale production and therefore unable to take advantage of the programme.

Faleke said garment producers in Nigeria were not accustomed to working on large orders with such time constraints and therefore had problems in meeting up.

“The way we operate in the country currently, we don’t have a manufacturing hub that can meet the demands of that market.

“You see people doing two pieces, one piece of garment, but America needs volume.

“For example, Walmart (an American multinational retail company) orders in millions of tonnes. How many garment factories in Nigeria can meet that?

“I know about two to three companies that have gotten orders to supply 600,000 T-shirts, but they cannot meet it,” he said.

The NEPC coordinator advised producers to form clusters and pool their resources together to increase their capacity to effectively deliver orders on schedule.

He also advised that rather than going into many clothing lines, they should focus on one or two where they had comparative advantage.

Faleke said the workshop, organised by NEPC in collaboration with the AGOA Trade Resource Center, was meant to address the lack of public awareness also militating against implementation of the scheme in Nigeria.

 

 

 

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Maritime First