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FG Owes Insurance Operators N8.4billion Premium

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  • FG Owes Insurance Operators N8.4billion Premium

Despite the ‘no premium no cover’ regime, the federal government is owing the Insurance Industry about N8.4billion, which ought to have been paid for the group life insurance coverage for all federal civil servants.

Group life insurance is insurance cover undertaken by the federal government through the Office of Head of Civil Service of the Federation on behalf of its federal civil servants for their protection against unforeseen circumstances, such as death and disabilities associated with industrial hazards while in active service.

The debt emanated from the outstanding balance of premiums owed to participating underwriters in group life insurance of federal civil servants in 2012 and 2016.

Reliable sources from one of the participating insurance companies hinted that in 2012, each of the underwriters were paid between 40 – 50 percent of their expected premiums for the group life insurance cover of civil servants assigned to them while over 50 percent (about N3 billion) of the total N6 billion premiums still remained unpaid till date, barely four years after.

The Source explained that although, the former President Goodluck Jonathan’s administration claimed that it could only afford 50 percent of the amount, the federal government, through the Office of Head of Civil Service of the Federation (OHCSF), never got back to the underwriters in subsequent years to offset the debts on premiums.

Further, with the exception of 2013- 2015, when the premiums were fully paid, the industry operators said that the federal government, is also yet to pay premiums for the renewal of the Group life Insurance of workers for the year, 2016.

The government merely informed the 20 selected participating underwriting firms without yet any financial commitments by payment of premiums. The expected premiums is N5.4 billion.

The Group Life Insurance of civil servants, which expired since July last year, ought to have been renewed by August 12, 2016 but up till date, the beginning of the second quarter of 2017, it has not been renewed due to lack of funding by the federal government.

Also, the insurance cover of assets of the federal government nationwide expired since August, last year. The processes for its renewal which will gulp several billions are yet to commence.

A Source at the OHCSF said that insurance of government assets, can wait for now, though no reason was given for downplaying the process.

The implication is that in the event of disaster affecting any of the government assets, there will be no compensation since it is no “no premium, no cover” regime.

Industry operators complained that the inability of the federal government to meet its financial obligations to insurance industry has consistently robbed the sector expected capital and thus, hamper its contributions to nation’s Gross Domestic Product (GDP) and economic growth.

Presently, the contribution of insurance sector to nation’s GDP is less than one percent, compared to 9.5 percent contribution by the new pension scheme.

In respect of the amount required and the approved underwriters, the Permanent Secretary (Common Services Office) in the OHSF, Mr. Yemi Adelakun, said: “It is usually N5.4 billion annually for civil servants. That’s the figure and that had been recurring for the last three or four years.

For this current one, I think we shortlisted 21 insurance companies and Bureau of Public Procurement (BPP) gave us certificate of no objection for 20. And we can only work with those approved by the BPP and that approval has been confirmed by Mr. President.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Crude Oil

Crude Oil Rises to $72 a Barrel on Strong Demand Recovery

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Brent crude oil - Investors King

Oil prices rose on Friday to fresh multi-year highs and were set for their third weekly jump on expectations of a recovery in fuel demand in the United States, Europe and China as rising vaccination rates lead to an easing of pandemic curbs.

Brent crude futures edged up 13 cents to $72.65 a barrel to 1145 GMT, a day after closing at their highest since May 2019.

U.S. West Texas Intermediate (WTI) crude futures were up 14 cents to $70.43 a barrel, a day after their highest close since October 2018.

U.S. investment bank Goldman Sachs expects Brent crude prices to reach $80 per barrel this summer as vaccination rollouts boost global economic activity.

The International Energy Agency said in its monthly report that OPEC+ oil producers would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022.

“OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” the Paris-based energy watchdog said.

It said that rising demand and countries’ short-term policies were at odds with the IEA’s call to end new oil, gas and coal funding.

“In 2022 there is scope for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target,” the IEA said.

Data showing road traffic returning to pre-COVID-19 levels in North America and most of Europe was encouraging, ANZ Research analysts said in a note.

“Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17% over the past two weeks, according to Eurocontrol,” ANZ analysts said.

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Energy

Africa Oil Week Remains Force of Good for Africa

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Crude oil - Investors King

Hyve Group Plc, organisers of Africa Oil Week have confirmed that business opportunities and discussions at the 2021 edition will remain focused on driving investment into Africa for its sustainable socio-economic development, as it has done for the past 27 years.

The event which will temporarily move to Dubai for 2021 due to COVID-19 restrictions in South Africa will take place on 8-11 November 2021 and has support from key African stakeholders.

Atty. Saifuah-Mai Gray, CEO of National Oil Company of Liberia said “As an oil and gas hub, Dubai represents a huge opportunity for Governments to meet a high concentration of investors with the financial and technical capability to partner in our national upstream”

Africa Oil Week is known for driving deals and transaction across the African oil and gas sector, and after being forced to host the 2020 edition virtually, confirmation that a live event will take place in 2021 has delighted clients.

Miriam Seleoane, Assistant Director at the Department of Trade and Industry and Competition said

“The DTIC has supported the Africa Oil Week for many years. For 2021 we will be taking a delegation of 20+ companies to the Oil Week to advance partnership and investment dialogue between our South African businesses and international partners. Africa Oil Week remains a huge platform for the DTIC and our South African private sector”.

The event will run under the theme “succeeding in a changed market”, and it will be the only large-scale oil and gas event focused solely on Africa to run in person in 2021.

In a previous statement, the organiser cited Dubai as the “next best location” after Cape Town due to the exceptional progress made in the UAE’s vaccination programme. Dubai is also the leading financial centre in the Middle East, Africa and South Asia and presents an opportunity for attendees to meet with new capital holders, further driving investment into Africa.

The 2022 event will return to Cape Town, where organises have said it is the event’s “natural home” and to which they are strongly committed for the long-term.

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Crude Oil

Crude Oil Rebounds on Thursday After Slipping on U.S Weak Demand

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Crude Oil - Investors King

Oil prices rose on Thursday a day after slipping on data indicating weak U.S. driving season fuel demand as investors eyed upcoming U.S. economic data.

Brent crude oil futures were up 18 cents, or 0.25%, at $72.40 a barrel, holding just shy of a high not seen since May 2019.

U.S. West Texas Intermediate oil futures rose 11 cents, or 0.16%, to $70.07 a barrel, staying near its highest since Oct. 2018.

“The market is recovering impressively from yesterday’s dismal weekly EIA report, the drop in weekly gasoline demand was particularly disappointing,” said Tamas Varga, analyst at PVM Oil Associates.

“It will interesting to see whether the monthly OPEC report due out later will confirm last month’s upbeat demand assessment for the second half the year. If it does, as expected, it should support oil prices.”

Varga added that U.S. inflation data and jobless claims would provide more direction on the health of world’s biggest economy and clues as to whether the Federal Reserve might start tapering stimulus.

U.S. crude oil stockpiles that include the Strategic Petroleum Reserve (SPR) fell for the 11th straight week as refiners ramped up output, but fuel inventories grew sharply due to weak consumer demand, the Energy Information Administration (EIA) said on Wednesday.

Crude inventories that exclude the SPR fell by 5.2 million barrels in the week to June 4 to 474 million barrels, the third consecutive weekly drop. But fuel stocks were up sharply, with product supplied falling to 17.7 million barrels per day (bpd) versus 19.1 million the week before.

Implied gasoline demand fell to 8.48 million bpd in the week to June 4, down from 9.15 million bpd from the week before, but up from 7.9 million bpd a year ago, EIA data showed.

Weighing on prices, India’s fuel demand slumped in May to its lowest since August last year, with a second COVID-19 wave stalling mobility and muting economic activity in the world’s third largest oil consumer.

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