Economy
Nigeria No Longer Paying Subsidy—Minister
By Adedapo Adesanya
The Minister of State for Petroleum (Oil), Mr Heineken Lokpobiri, has reiterated that Nigeria is no longer paying fuel subsidy, following widespread indications that the country still subsidises premium motor spirit (PMS), otherwise known as petrol.
Recall that some stakeholders, including oil marketers, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), and the International Monetary Fund (IMF), have claimed that the country continues to pay subsidies to cushion high fuel costs.
Speaking in an interview on the back of the 25th anniversary of Nigeria’s democracy, Mr Lokpobiri stated that the Nigerian National Petroleum Company (NNPC) Limited had the statutory responsibility to step in anytime things were getting out of hand.
“Let me say categorically that the president had rightly said, on the day he was sworn in, he said subsidy is gone. The president was misunderstood. The last government did not make any provision for subsidy in the 2023 budget.
“I can confirm to you that the subsidy is gone. But there could be strategic interventions from time to time. But officially, the subsidy is gone. If you look at the Petroleum Industry Act (PIA), the NNPC, as a national oil company, also has a legal obligation to intervene from time to time,” the Minister stated.
He argued that without the subsidy removal, Nigeria would have been like Venezuela, stressing that the president is not appreciated well enough for the decision to remove the fuel subsidy.
Mr Lokpobiri also said the Port Harcourt refinery will start working before the end of the third quarter of the year, indicating a new date from December 2023 previously announced for the commencement of operations.
“I’m not there. I’m not there in the Port Harcourt refinery. These were projects that I met on the ground. When I came, I visited all the refineries. It is what they briefed me. The brief they gave to me, I told Nigeria that these refineries would be ready sometime.
“I also do know that I went to Port Harcourt in December when it first came on. I’ve also gone to Warri, and advanced work has been done. Port Harcourt, from reports available to me, shows that hydrocarbon has been introduced.
“But the point is that we are doing whatever we can to ensure that we complete the rehabilitation of these three refineries. The report available to me shows that within the next quarter…within means that it could be next week, it could be within the next quarter that hydrocarbon will be refined and be sold to the public.”
The Minister also said he had been told by the national oil company that Nigeria’s total daily petrol consumption now hovered between 50 million litres and 60 million litres.
On daily oil production, Mr Lokpobiri stated that Nigeria was currently drilling an average of 1.5 million barrels per day, stressing that the country has been able to reduce oil theft to the barest minimum, which is the reason for the production increase.
“That is why you’re also seeing part of the output. Like I said, when we came into office, we were doing an average of one million barrels per day. The fact that we’re doing about 1.5 million barrels on average is a 50 per cent increment. And I can assure you that we’ll do whatever we can to continue to increase oil production,” he said.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active 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 worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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