Economy
FG Must Scrap Petroleum Equalisation Fund—Oyegbami
By Modupe Gbadeyanka
Author of ‘Reversing the Rot in Nigeria,’ Mr Olusegun Oyegbami, has condemned Federal Government for shielding the fraud behind the Petroleum Equalisation Fund (PEF), saying the PEF policy should be stopped.
Mr Oyegbami, who has spent more than four decades in the Nigeria petroleum downstream sector, described former President Olusegun Obasanjo and President Muhammadu Buhari as the co-founder of Nigeria’s woes.
“The Petroleum Equalisation Fund (PEF) was put in place in early 1976 when former President Olusegun Obasanjo was Head of State and current President Muhammadu Buhari was the Petroleum Minister, and the intention might have been honest to let everybody have equal access to the petroleum product but equal access should not have been the mantra we should follow but equitable access.
“That is to say if you are in a particular place where you are close to the petrol, then you can buy it slightly cheaper but it should be available to everybody in that location at same price,” the author said.
Mr Oyegbami expressed further that the whole idea in economics is that Nigeria government operates on a comparative advantage and localization of citizens’ advantage.
“When you are in a place like Warri or Port Harcourt and when we are talking about importation, Lagos where the petrol lands should necessarily be cheaper than other places where they come to pick that petrol but where government is now paying to transport petrol to far places that is where the fraud comes into it, which make us to be running a non-economic platform, it is very wrong. Until we change this, Nigeria can never make any progress.
“Because it is looking like government is favouring those people transporting the petrol to their places at government expense, this should not happen and this is what has been happening for more than 40 to 42 years and until we change that, we cannot get it right as a country. I am very convinced about this, you run an economy on an economic template and not as a social platform,” he said.
Discussing fuel subsidy, Mr Oyegbami said the government has never subsidized fuel for its citizens for one day.
“The price at which petrol has been coming in has always been the economic price and up until the PEF scam came in, the money being collected started to be more than what has been voted out of the purse of fixing the price.
“It is like when you increase the price from N1 to N1.50k maybe before they use to allocate 5k out of that N1 for transportation but when it is now N1.50k they will add another 5k to transportation cost so that they will now have more money to pay for transportation and 10k will now be used for transportation.
“So, they have not subsidized the price of petrol as at that time, all they have subsidized is transportation of the product to distant locations. So, it was when, often time when the price began to sky rocket to N100 they now decided that because we are bringing it in at N80 we are going to be giving you additional money, but all the extras are being added to cost of transportation.
“Constantly, the cost of transportation that is the bridging element in the price builds up, that is what always goes up steadily.
“I am telling you that out of N145 as the cost of petrol today, N6.20K is still allocated for transportation.
“Why? It means that anybody using fuel down south is still paying N6.20k more than he should have paid. This is now gathered together to transport petrol to other parts of the country, especially the North.
“It is really an economic matter that the south should not continuously right from over 42 years ago be paying for transporting fuel to the North, because come to think of it whatever is coming from the North always has its own element of transportation that the South pays for. We have never eaten beef, cow, yam at the same price as the north.
“It is purely an economic matter, it is when you are looking at it from political angle that you will say this man is trying to incite one tribe against the other, No, it is purely economics. These are elements of deception that we have been having in this country. Sometime in the second republic, some people were arrested for ‘smuggling’ beans from Bida to Oyo. That is funny.
“Nigeria government should let the Nigerians trade fairly among themselves, if we are going to trade in petrol take the petrol at the available price at the depots, add your own transport cost and sell it there, we will have normalcy in this economy within a year or two but now we still have deception and manipulation going on even right now because anybody who is buying petrol in Lagos is still paying N6.20k for carrying it to the north, it is wrong. That should stop.
“It is when this manipulation stops then we know this government of Buhari is ready to fight corruption, because the same Buhari started the PEF far back then and he’s still protecting it till today, until we stop that before we know he is actually dealing with corruption honestly and he’s treating all Nigerians fairly across board. But for now, No, that is not happening,”
When asked about the inspiration behind written the book, Mr Oyegbami said the death of his mother, more than anything else, epitomizes the transience of existence because it is the departure of spaceship into the horizon.
“You feel lost and marooned leading to a compulsion and resolve to improve things in your society because the inevitability of my own imminent departure is more palpable”.
He said the feeling gave him rise to the writing of ‘Reversing The Rot In Nigeria’ a critical exposé on the nation’s Cul-de-sac.
By Adedapo Adesanya
Five securities pulled down the NASD Over-the-Counter (OTC) Securities Exchange by 1.72 per cent on Friday, August 14, cutting the market capitalisation by N47.04 billion to N2.689 trillion from N2.727 trillion, and slicing the NASD Security Index (NSI) by 78.37 points to 4,465.83 from 4,532.03 points.
11 Plc led the price decliners yesterday after its price went down by N15.03 to N230.00 per share from N245.03 per share. MRS Oil Plc weakened by N13.20 to N118.80 per unit from N132.00 per unit, Central Securities Clearing System (CSCS) Plc slid by N10.30 to N99.46 per share from N109.76 per share, Okitipupa Plc fell by N6.99 to N270.01 per unit from N277.00 per unit, and Afriland Properties Plc dipped by N2.00 to N20.00 per share from N22.00 per share.
Business Post reports that the OTC securities exchange recorded four gainers during the session, led by FrieslandCampina Wamco Nigeria Plc, which appreciated by N9.85 to N169.85 per unit from N160.00 per unit. IPWA Plc gained 70 Kobo to close at N10.41 per share versus N9.71 per share, Industrial and General Insurance (IGI) Plc rose by 4 Kobo to 54 Kobo per unit from 50 Kobo per unit, and Geo-Fluids Plc improved by 1 Kobo to N2.06 per share from N2.05 per share.
The volume of trades soared by 64.8 per cent to 3.2 million units from the previous session’s 1.9 million units, the value of transactions jumped by 78.2 per cent to N375.7 million from N210.8 million, and the number of deals surged by 35.3 per cent to 46 deals from 34 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 Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 79.0 million units exchanged for N5.7 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Dipo Olowookere
The dominance of the bears on the Nigerian Exchange (NGX) Limited was consolidated on Friday, after further inflicting an 0.12 per cent loss at the close of trading activity.
All the key sectors of the local stock market turned red yesterday as a result of sustained profit-taking, though the industrial goods space was flat.
The insurance counter lost 1.49 per cent, the energy index shed 0.63 per cent, the consumer goods segment declined by 0.46 per cent, and the banking sector tumbled by 0.23 per cent.
Consequently, the All-Share Index (ASI) retreated by 398.18 points to 242,619.20 points from 243,017.38 points, and the market capitalisation receded by N257 billion to N156.624 trillion from N156.881 trillion.
Fortis Global Insurance lost 9.31 per cent to trade at N2.63, Omatek depreciated by 9.04 per cent to N1.51, John Holt slipped by 9.00 per cent to N9.10, RT Briscoe slumped by 7.94 per cent to N11.60, and Dangote Sugar went down by 7.79 per cent to N64.55.
But International Energy Insurance gained 9.92 per cent to sell for N5.32, Trans-Nationwide Express appreciated by 9.65 per cent to N2.84, Guinea Insurance improved by 6.67 per cent to 80 Kobo, Regency Alliance grew by 6.25 per cent to 85 Kobo, and Japaul jumped by 5.36 per cent to N2.95.
The market breadth index remained negative, with 30 price losers and 21 price gainers, indicating weak investor sentiment.
The level of activity contracted yesterday, with the trading volume, value, and number of deals down by 66.67 per cent, 10.65 per cent, and 5.60 per cent, respectively.
This was because market participants transacted 1.4 billion shares worth N45.3 billion in 39,134 deals during the session compared with the 4.2 billion shares valued at n50.7 billion traded in 41,454 deals on Thursday.
Fortis Global Insurance was the most active equity for the day, with a turnover of 874.1 million units valued at N2.4 billion, Cornerstone Insurance sold 100.3 million units worth N506.5 million, Universal Insurance traded 56.7 million units for N44.5 million, Sterling Holdings exchanged 53.3 million units worth N402.9 million, and MTN Nigeria transacted 44.6 million units valued at N31.4 billion.
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.
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