Nigeria's main labor union to strike over tripling of fuel prices

MOSCOW (MRC) -- Nigeria's main labor union said on Friday it plans to go on strike from Wednesday to protest against a tripling of fuel prices in the country after new president Bola Tinubu scrapped a costly subsidy, said Reuters.

The government hopes the lifting of the fuel subsidies - which caused prices to rise to 557 naira per liter from 189 naira at the petrol pumps - will help alleviate a funding crisis in Africa's biggest economy.

Nigerian Labour Congress (NLC) Joe Ajaero made the announcement after an emergency meeting of the union's executive council in Abuja.

"The Nigeria Labour Congress decided that if by Wednesday next week that NNPC, a private limited liability company that illegally announced a price regime in the oil sector, refuses to revert itself for negotiations to continue, that the Nigeria Labour Congress and all its affiliates will withdraw their services and commence protests nationwide until this is complied with," Ajaero said.

A wave of strikes ensued the last time Nigeria tried to introduce a similar measure in 2012, with authorities eventually reinstating some subsidies.

We remind, Nigerian President Muhammadu Buhari will commission the multi-billion dollar Dangote oil refinery in two weeks, a presidency spokesperson said on Sunday, setting up the plant for its first production since construction started in 2016. Nigeria, Africa's biggest oil producer, sees the 650,000 barrels-per-day refinery - being built by billionaire industrialist Aliko Dangote's Dangote Group - as a solution to ending the country's reliance on imports for nearly all of its refined petroleum products.

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MOSCOW (MRC) -- Caixin’s China manufacturing purchasing managers’ index (PMI) picked up from 49.5 in April to 50.9 in May, marking the first expansion in three months, the Chinese media firm said on Thursday, as per Reuters.

A PMI reading below 50 indicates contraction in the manufacturing economy, while a higher number denotes expansion. The Caixin PMI figure stood in contrast with China's official manufacturing PMI for May which fell deeper into contraction mode at 48.8, marking a five-month low.

The Caixin PMI surveys small and medium-sized enterprises (SMEs) and export-oriented enterprises located in eastern coastal regions while the official PMI is tilted toward larger state-owned enterprises. Production expanded at the quickest rate in nearly a year, supported by a fresh rise in overall new business amid reports of firmer client demand, Caixin said in a statement.

The rate of output growth picked up from April's three-month low and was the best seen since June 2022. "The subindex for total new orders recorded its second-highest reading since May 2021 as surveyed businesses reported more clients and demand, even though demand remained a bit weaker than supply," said Wang Zhe, a senior economist at Caixin Insight Group.

External demand remained stable, with the gauge for new export orders rising marginally within expansionary territory, Wang said. Overseas shipments of intermediate goods significantly outperformed shipments of consumer and investment products, according to Wang.

Average delivery times for inputs at Chinese factories shortened again in May due to increased capacity at suppliers and improved material availability. However, business confidence around the 12-month outlook for output slipped to a seven-month low in May amid concerns over lingering global economic uncertainty, Caixin said.

We remind, Caixin’s China manufacturing purchasing managers’ index (PMI) for April slipped to 49.5 from the neutral 50.0 mark in March amid subdued domestic demand conditions. A PMI reading above 50 indicates expansion in the manufacturing economy, while a lower number denotes contraction. The weaker Caixin PMI mirrors China’s official manufacturing PMI released earlier this week which hit its lowest level since January 2023, contracting to 49.2 in April from 51.9 in March.
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MOSCOW (MRC) -- A group of U.S. congressmen have formally complained about what they call unfair ethanol trade practices by Brazil that includes a blockade of U.S. companies seeking to take part in the Brazilian low-carbon biofuel program RenovaBio, said Reuters.

The bipartisan group of 21 members of the U.S. Congress are asking Trade Representative (USTR) Katherine Tai to address the Brazilian tariffs on U.S. ethanol and the non-tariff barrier created by the biofuel program implemented in 2020.

RenovaBio is a carbon market that gives Brazilian biofuel producers an additional revenue source. Companies such as ethanol makers generate carbon credits, called CBios, from the lower emissions of biofuels when compared to oil-derived fuels such as gasoline.

Those carbon credits are sold to fuel distributors in Brazil who have targets to cut emissions, or in a secondary market at Brazil's B3 exchange.

The lawmakers in a letter to the USTR complained about the implementation in Brazil in February of an import tariff of 16% on U.S. ethanol. That import tax will increase to 18% in 2024.

They also complained about the lack of approval from Brazilian authorities of U.S. companies' applications to take part in RenovaBio to be able to generate and sell carbon credits.

"Brazilian ethanol producers have access to our Renewable Fuel Standard and California's Low Carbon Fuel Standard program, which recognize the inherent value of low-carbon biofuels," the letter said. "This treatment is not reciprocated by Brazil, where U.S. ethanol producers, after two years, have yet to be approved for Brazil's biofuel program."

The U.S. government has said in the past that it was working with Brazilian officials to get certificates for U.S. ethanol plants.

Brazil's oil and biofuels regulator ANP, who is in charge of RenovaBio certification, did not immediately answer a request for comment.

We remind, Oil prices rose about 2% on Friday after the U.S. Congress passed a debt ceiling deal that averted a government default in the world's biggest oil consumer and jobs data fed hopes for a possible pause in interest rate hikes ahead of a meeting of OPEC and its allies this weekend. Brent futures rose USD1.36, or 1.8%, to USD75.64 a barrel by 11:46 a.m. EDT (1546 GMT). U.S. West Texas Intermediate (WTI) crude rose USD1.28, or 1.85, to USD71.38.

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MOSCOW (MRC) -- Europe's largest economy is also one of the region's most aggressive advocates for shifting energy systems away from fossil fuels, and leads the continent in emissions reduction targets and investments in renewable energy supplies, said Reuters.

However, Germany is also home to Europe's largest chemicals sector which churns out plastics, paints, acids and other key inputs that are critical to manufacturers and heavy industries that form the backbone of the German economy.

And as most chemical plants run off natural gas or coal, and use crude oil as a major feedstock, Germany's plans to phase out use of fossil fuels over the coming decades represent a potential existential threat to the entire chemical sector.

Ensuring the continuing viability of such an important segment of the German economy even as the country's energy system is retooled will be a key test for policymakers and business planners over the coming years.

An ill-managed collapse of the chemicals supply chain could deal a heavy blow to the rest of Germany's manufacturing economy, which relies on an abundant array of affordable inputs to generate its own products.

The sector is also a major employer that sustains large raw material and end-product supply chains, so any downturn could pose significant unemployment risks across Europe.

That said, a successful shepherding of the chemicals industry through the country's energy transition, including enabling chemical producers to decarbonize their own energy supplies and outputs, would sustain a vital competitive advantage for Germany's overall economy.

In addition, an updated and low-emitting chemicals sector that generates suites of critical products for other industries could become a vital export earner for Germany, which has ambitions to develop global leaders across the energy transition spectrum, including in the recycling of plastic waste.

We remind, Germany's chemicals sector must first recover from a torrid 2022, when surging power costs caused chemicals output to drop by 10%, petrochemical production to fall 15.5%, and for one in every four firms in the sector to incur losses, according to the German Chemicals Association (VCI). Sharply lower business activity also caused a drop in chemicals consumption last year, but as economic activity recovered in 2023 a lingering shortage of key chemical products has pushed German chemicals prices to near record premiums over those supplied by other producers.

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MOSCOW (MRC) -- Russia's seaborne diesel and gasoil exports were 21% lower in May from a month earlier at about 3.1 million tons as seasonal refinery maintenance cut supply and domestic demand rose, data from traders and Refinitiv Eikon showed, said Reuters.

Idle primary oil refining capacity for May has been revised up by 500,000 tons from the previous plan to 5.0 million tons as several refineries extended maintenance. Since the full EU embargo on Russian oil products took effect on Feb. 5, traders have diverted diesel exports from Russian ports to countries in Africa, Asia and the Middle East. Previously Europe was the main buyer.

According to Refinitiv data, Russian origin diesel sent to Turkey slipped to 0.9 million tons in May from 1.2 million tons in April. The port of discharge had yet to be confirmed for around half the cargoes. One trader said some Russian diesel would be involved in ship-to-ship transfer near the Turkish port of Mersin.

Last month, nearly 0.43 million tons of the diesel that loaded in Russian Baltic ports was heading to Brazil, Refinitiv data showed. Together, Turkey and Brazil have been the main destinations for diesel exported from Russian ports this year. From January-to-May, Turkey received 5.2 million tons and Brazil 1.6 million tons, compared with respectively 5 million tons and 74,000 tons for the whole 2022, the Refinitiv data showed.

Russian diesel exports to African countries totaled about 0.5 million tons in May after 0.9 million tons in April, with Togo, Libya and Tunisia the top importers, according to the data. Another 325,000 tons of diesel from Russia were in May destined for STS loadings near the Greek port of Kalamata, Refinitiv data shows. The final destinations were mostly unknown, but traders said they expected them to be in Asia or the Middle East.

In March, Russia sent diesel via STS near Kalamata to Saudi Arabia in addition to direct supplies. According to Refinitiv shipping data, diesel loadings from Russian ports to Saudi Arabia totaled about 95,000 tons in May after 383,400 tons the previous month, with another 170,000 tons heading to Fujairah, the major transit and blending hub for oil products in the United Arab Emirates.

All the shipping data above are based on the date of cargo departure. About 200,000 tons of diesel loaded in Russian ports in May do not yet have a confirmed destination.

We remind, Russia's Lukoil has increased oil production at Iraq's southern West Qurna 2 oilfield by 80,000 barrels per day (bpd) to a total of 480,000 bpd, an oil official told Reuters on Thursday. Production rose after the completion of the connection of 47 new oil wells which boosted production, an Iraqi oilfield official said, adding that output could reach 500,000 bpd in a short period of time if required. The increase in Iraq's production comes as Turkey continues to halt Iraq's 450,000 bpd of northern exports through the Iraq-Turkey pipeline.

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