Economy
IPMAN Laments Secret Return of Fuel Subsidy Payments
By Adedapo Adesanya
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has raised the alarm over alleged secret reintroduction of fuel subsidy payments by the federal government.
In late May, after taking the oath of office, President Bola Tinubu announced the total removal of subsidy on petrol, which saw prices jump to over N600.
The removal of fuel subsidy and the resulting increment in the pump of petrol by almost 300 per cent had quadrupled the inflation rate in the country and affected the purchasing power of Nigerians, especially the middle class and low-income earners.
It was expected that as the price fluctuates in the international oil market, it will lead to changes in the price of petrol and other fuels in Nigeria, but there has been stability over the past months. This could only point to a return of subsidy payments.
This has drawn the wrath of IPMAN, who accused the FG of using proceeds from the Nigeria LNG Limited, NLNG’s, dividends to subsidise fuel, in order to retain fuel prices around N580 – N620 per litre.
According to IPMAN Chairman in Rivers State, Mr Joseph Obele, crude oil prices at the international market currently was above $90 per barrel, yet Nigerians are still buying the commodity at the rate of N600 per litre, which, he said, was unrealistic without subsidy payment.
He recalled that the federal government said it would allow market forces to determine the fuel price, adding the landing cost of petrol was almost N800 per litre following the rise in crude oil prices.
He said: “With the consistent increment in the price of crude oil and rise in foreign exchange rates, it is obvious that the federal government has tactically intervened by closing the price gap in the landing cost of PMS and the pump price of fuel.
“The argument whether the subsidy is back in Nigeria came to an end when a document published by the Federal Account Allocation Committee showed that the Nigerian LNG Limited paid $275 million, an equivalent of N169.4 billion as dividends to Nigeria through NNPC Limited for the month of August.
“The document indicates that NNPC Ltd. used part of the money in question to pay for PMS subsidy for the month of August 2023.
“We are aware that the current NNPC Ltd is not a charitable organization or a government-funded organisation anymore.
“The happenings or effect of external events in the international market will adversely reflect on the pump price of PMS in Nigeria because we solely rely on the importation of PMS from the international market.”
IPMAN further warned that Nigeria’s economy will begin to experience stability only when the nation commences production of petrol in-country.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited was in green on Friday after it closed higher by 0.30 per cent as a result of sustained bargain hunting.
Customs Street was up yesterday after three of the five major sectors came under buying pressure, with the consumer goods index up by 1.64 per cent, the industrial goods space up by 1.12 per cent, and the banking counter up by 0.64 per cent.
Business Post observed that profit-taking brought down the insurance by 2.61 per cent, and weakened the energy sector by 0.01 per cent.
At the close of business, the market capitalisation increased by N707 billion to N131.166 trillion from N130.459 trillion, and the All-Share Index (ASI) expanded by 1,097.86 points to 203,770.42 from 202,672.56 points.
Transactions by Nigerian stock investors shrank during the session, as 548.6 million shares worth N31.5 billion exchanged hands in 48,538 deals compared with the 652.9 million shares valued at N39.8 billion transacted in 51,101 deals a day earlier.
This implied that the trading volume went down by 15.98 per cent, the trading value depreciated by 20.85 per cent, and the number of deals crashed by 5.02 per cent.
Access Holdings finished the day as the busiest equity after selling 52.7 million units valued at N1.4 billion, Zenith Bank exchanged 47.8 million units worth N5.4 billion, UBA traded 38.9 million units for N1.8 billion, Secure Electronic Technology transacted 36.7 million units worth N35.5 million, and GTCO sold 34.9 million units valued at N4.6 billion.
The market breadth index was negative during the session with 20 price gainers and 38 price losers, indicating weak investor sentiment.
Trans Nationwide Express appreciated by 9.91 per cent to N3.77, International Breweries grew by 9.88 per cent to N13.35, Chams rose by 9.84 per cent to N3.35, Guinea Insurance improved by 9.38 per cent to N462.90, and Lafarge Africa gained 8.52 per cent to close at N233.20.
On the flip side, Omatek lost 10.00 per cent to trade at N2.07, Austin Laz declined by 9.93 per cent to N3.99, Coronation Insurance dipped by 9.88 per cent to N2.92, Zichis crashed by 9.58 per cent to N12.55, and Cornerstone Insurance retreated by 8.77 per cent to N5.20.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed the last trading session of the week in the southern territory after further losing 0.59 per cent on Friday, April 10.
This happened as three price decliners weakened the NASD market due to continued sell-offs. The bourse did not finish in green this week.
11 Plc lost N24.70 to close at N222.30 per share compared with the previous day’s N247.00 per share, MRS Oil dropped N1 to settle at N164.00 per unit versus Thursday’s N165.00 per unit, and Geo-Fluids decreased by 25 Kobo to N3.00 per share from N3.25 per share.
As a result, the market capitalisation shrank by N13.79 billion to N2.315 trillion from N2.329 trillion, and the NASD Unlisted Security Index (NSI) declined by 23.05 points to 3,870.45 points from 3,893.50 points.
Yesterday, there were two price gainers led by Central Securities Clearing System (CSCS) Plc, which chalked up N1.07 to sell at N64.21 per unit versus N63.50 per share, and Impresit Bakalori Plc appreciated by 22 Kobo to N2.42 per share from N2.20 per share.
The volume of securities fell by 81.9 per cent to 188,593 units from 1.04 million units, the value of securities decreased by 36.3 per cent to N25.7 million from N40.4 million, and the number of deals remained unchanged at 26 deals.
Great Nigeria Insurance (GNI) Plc was the most traded stock by value on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by CSCS Plc with 57.6 million units exchanged for N3.9 billion, and Okitipupa Plc with 27.6 million units worth N1.8 billion.
GNI Plc was also the most traded stock by volume on a year-to-date basis with 3.4 billion units transacted for N8.4 billion, followed by Resourcery Plc with 1.1 billion units s0ld for N415.7 million and Infrastructure Guarantee Credit Plc with 400 million units traded at N1.2 billion.
By Adedapo Adesanya
Oil futures settled lower on Friday ahead of talks between Iran and the United States aimed at securing a permanent ceasefire.
Brent futures lost 72 cents or 0.8 per cent to trade at $95.20 a barrel, while the US West Texas Intermediate (WTI) crude futures fell by $1.30 or 1.3 per cent to $96.57 a barrel. As a result, these benchmarks posted their biggest weekly decline since 2022.
Despite the ceasefire announced earlier this week, traffic through the critical oil chokepoint remains severely restricted and under supervision and approval by Iran’s Islamic Revolutionary Guard Corps (IRGC).
Crude futures hovered near $100 a barrel as attacks continued and the flow of oil through the Strait of Hormuz remained heavily restricted, and concerns lingered over potential supply disruptions in Saudi Arabia. Prices in the physical market were at record highs.
Market analysts noted that the key issue for the oil market is whether ship traffic through the Strait of Hormuz will resume. However, there are no signs of this happening. If oil supplies from the Persian Gulf remain blocked, oil prices are likely to rise again.
According to Reuters, traffic through the strait remained less than 10 per cent of normal volumes as Iran warned ships to keep to its territorial waters. Most ships that have sailed through the Strait in the past day were linked to Iran.
Iran also wants to charge fees for ships to pass through the Strait under a peace deal.
Oil prices could spike and hit again their peak Iran-war levels at nearly $120 per barrel if a full recovery of vessel traffic through the Strait of Hormuz takes until July, according to JP Morgan.
Attacks on Saudi energy facilities have cut the kingdom’s oil production capacity by about 600,000 barrels per day and reduced its East-West Pipeline throughput by about 700,000 barrels per day.
Meanwhile, Lebanon said it intends to take part in a meeting with the US and Israeli representatives in Washington next week to discuss and announce a ceasefire.
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