Economy
Fuel Subsidy Gulps N774m Daily Due to Smuggling—NNPC
By Dipo Olowookere
Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Maikanti Baru, has raised an alarm over the huge amount of debt the agency incurs daily as payment for subsidy for Premium Motor Spirit (PMS) otherwise known as petrol.
He said on a daily basis, the state-owned firm incurs an under-recovery of N774 million in order to allow citizens of Nigeria buy petrol at the regulated rate of N145 per litre.
Mr Baru explained that the huge amount paid is as a result of the product being smuggled from Nigeria to other neighbouring countries like Benin Republic, Niger Republic, Ghana, Cameroon and others, where fuel is sold higher than N145 per litre.
According to him, the smuggling the commodity to these countries was made possible with the proliferation of fuel stations in communities with international land and coastal borders across the country, making it difficult to sanitize the fuel supply and distribution matrix in the country.
Leading a top management team of the corporation on a visit to the Comptroller General of the Nigerian Customs Service (NCS), Mr Hameed Ali, the GMD said he got his information from detailed study conducted by NNPC.
He said that the activities of the smugglers had led to recent observed abnormal surge in the evacuation of petrol from less than 35 million litres per day to more than 60 million litres per day which is in sharp contrast with established national consumption pattern.
Providing a detailed presentation of the findings, the NNPC GMD informed that 16 states, having amongst them 61 Local Government Areas with border communities, account for 2,201 registered fuel stations.
The fuel tank, he noted, had a combined capacity of 144 million litres of petrol, while eight states with coastal border communities spread across 24 LGAs amongst the states account for 866 registered fuel outlets with combined petrol tank capacity of 73.4 million litres.
A further breakdown of the finding shows that among the states with land border, three LGA’s in Ogun State account for 633 fuel stations with combined petrol tankage of 40.5 million litres while nine LGA’s in Borno State have 337 fuel outlets with combined petrol storage capacity of 21 million litres.
He said also that with one LG as border community has 235 registered fuel stations with total petrol storage facility of 19.9 million litres, while on the coastal front, Lagos with six LGA’s leads with 487 registered fuel stations with combined in-built storage capacity of 50.2 million litres.
Akwa Ibom with five LGA’s has 134 registered retail outlets with capacity to store 8.3 million litres, while Ondo State with two LGA’s has 110 fuel stations with capacity to store 3.9 million litres.
Mr Baru explained that because of the obvious differential in petrol price between Nigeria and other neighbouring countries, it had become lucrative for the smugglers to use the frontier stations as a veritable conduit for the smuggling of products across the border, saying this had resulted in a thriving market for Nigerian petrol in all the neighbouring countries of Niger Republic, Benin Republic, Cameroun, Chad and Togo and even Ghana which has no direct borders with Nigeria.
“NNPC is concerned that continued cross-border smuggling of petrol will deny Nigerians the benefit of the Federal Government’s benevolence of keeping a fix retail price of N145 per litre despite the increase in PMS open market price above N171 per litre,” he said.
Welcoming the NNPC GMD and his team to the Customs headquarters, Mr Ali said the NCS would work with the corporation to stem the tide of cross-border smuggling of petroleum products, noting that all hands must be on deck to ensure the economic survival of the country.
The Customs boss thanked NNPC GMD for the elaborate data he provided on the fuel supply situation, noting that this would enable the service fashion out the appropriate architecture to combat the menace.
He called on the authorities to tackle the issue of price differentials which is the underlying motivation for smuggling activities.
By Adedapo Adesanya
The Naira maintained stability against the United States Dollar in the different segments of the foreign exchange (FX) market on Friday, August 14, according to data obtained by Business Post.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the local currency remained unchanged at N1,357.65/$1, but lost N6.05 against the Pound Sterling to trade at N1,840.10 versus the previous session’s N1,834.05/£1, and depreciated against the Euro by N4.70 to sell for N1,571.70/€1 compared with the preceding day’s N1,567.00/€1.
At the black market, the Nigerian currency traded flat against the Dollar at N1,395/$1, but gained N3 at the GTBank forex desk to quote at N1,364/$1 versus Thursday’s exchange rate of N1,367/$1.
Data from the Central Bank of Nigeria (CBN) showed that interbank FX transactions surged by 51.2 per cent to $119.594 million from $79.097 million. These transactions were executed in 137 deals, higher than the 98 deals recorded a day earlier.
FX inflows from exporters, remittances and other sources, alongside demand from importers and individuals requiring Dollars, continue to shape market conditions.
Meanwhile, the cryptocurrency market recovered yesterday after experiencing a downturn in the previous sessions following reports that index provider MSCI has proposed new “non-operating company” screens for its Global Investable Market Indexes. Although the framework does not explicitly target cryptocurrency, it evaluates whether a company’s core operating assets constitute more than 50 per cent of its total holdings.
Heavy digital asset treasury adopters, including Strategy and Metaplanet, fail the proposed criteria and face potential removal during upcoming index rebalancings. While inclusion in major equity benchmarks previously allowed passive index funds and ETFs to automatically acquire these stocks, their removal could trigger forced institutional selling.
Dogecoin (DOGE) grew by 0.7 per cent to $0.07, Binance Coin (BNB) expanded by 0.6 per cent to $611.34, Ethereum (ETH) added 0.4 per cent to trade at $1,879.65, and Bitcoin (BTC) increased by 0.2 per cent to $63,045.87, with Ripple (XRP), the US Dollar Tether (USDT), and the US Dollar Coin (USDC) flat at $1.00, respectively.
But Cardano (ADA) lost 1.2 per cent to trade at $0.1795, TRON (TRX) shed 0.4 per cent to finish at $0.3323, and Solana (SOL) declined by 0.2 per cent to $75.60.
By Adedapo Adesanya
Oil price climbed over $1 a barrel on Friday on tanker attacks and a lack of progress on a peace agreement between the President Donald Trump administration and Iran’s leadership.
Brent futures settled at $88.52 a barrel after gaining $1.45 or 1.67 per cent, and the United States’ West Texas Intermediate crude futures finished at $82.40, up $1.15 or 1.42 per cent.
Market analysts noted that new attacks on tankers and lack of progress on a cease-fire agreement, which, in turn, is making traffic in the Strait of Hormuz constrained, adding pressure to the waterway through which 20 per cent of global supply can pass.
Two vessels from the state-owned Abu Dhabi National Oil Company were attacked while transiting the strait on Thursday. Iran’s Revolutionary Guards have previously threatened action against vessels transiting the strait if they are linked to its adversaries or fail to comply with Iranian directives.
As the US and Iran made claims over control of the strait, shipping traffic through the channel fell below the month’s average. Before US-Israeli attacks on Iran began in late February, the strait handled about one-fifth of global oil and liquefied natural gas supplies.
The US said it could maintain a naval blockade of Iran indefinitely and increase economic pressure on Tehran in response to stalled ceasefire talks.
The country’s Treasury Secretary Scott Bessent said there will be more announcements coming next week because “we are going to apply measures like have never been seen in the history of economic isolation of a country.”
Crude oil exports from Russia’s Sheskharis terminal at the Black Sea port of Novorossiysk were suspended on Friday following a drone attack, adding to disruptions at one of the country’s key export outlets.
The Organisation of the Petroleum Exporting Countries (OPEC) had slashed its outlook for 2026 global oil demand growth to 580,000 barrels per day, a stark contrast to the International Energy Agency’s 1.6 million barrels per day decline, marking the fourth straight month when the Vienna-based organisation was forced to curb its forecast amidst the Hormuz crisis.
In its monthly report, the IEA predicted that global supply will fall by 4.3 million barrels per day in 2026, pushing the Q3 deficit to 1.8 million barrels per day even as record fuel prices lead to an unprecedented 1.6 million barrels per day demand destruction.
By Adedapo Adesanya
The Nigerian Insurers Association (NIA) has disclosed that seven additional insurance companies have secured full recapitalisation approval from the National Insurance Commission (NAICOM), bringing the industry-wide recapitalisation exercise to a successful conclusion.
In a statement on Friday, NIA Chairman, Mrs Ebelechukwu Nwachukwu, said the milestone represented significant progress towards building a stronger, more competitive and trusted insurance market in Nigeria.
She said the seven companies, alongside the 41 insurance companies and two reinsurance companies earlier approved, had demonstrated resilience, financial discipline and corporate strength by successfully completing the final verification process.
“Having successfully navigated the rigorous final verification process, these companies, alongside the earlier approved 41 insurance companies and two reinsurance companies, have demonstrated exceptional resilience, corporate fortitude, and financial discipline,” Mrs Nwachukwu said.
She added that the successful recapitalisation had positioned the companies to deliver greater value to policyholders and contribute to deeper insurance penetration nationwide.
Mrs Nwachukwu commended NAICOM for its regulatory oversight during the exercise, describing the commission’s approach as fair, structured and focused on strengthening market integrity.
“NAICOM’s strategic foresight and structured execution have elevated the Nigerian insurance industry, reinforcing its position within the broader financial sector as a substantially stronger, highly resilient, and globally competitive market,” she said.
The NIA chairman reaffirmed the association’s commitment to supporting insurance companies as they adapt to new regulatory requirements under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
She said the association would continue to work with NAICOM to promote a sustainable and future-ready insurance sector.
Mrs Nwachukwu also assured policyholders, investors and other economic stakeholders that the recapitalised industry was better positioned to support economic growth.
“With this recapitalization complete, the Nigerian insurance sector enters a transformative era. The industry is fully equipped to settle genuine claims promptly, absorb higher local and international risks, and serve as a cornerstone of financial stability, directly supporting President Bola Ahmed Tinubu’s vision of achieving a $1 trillion economy by 2030,” she said.
