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We’ve Imported $5.8bn Worth of Petrol, Says NNPC

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NNPC - Investors King
  • We’ve Imported $5.8bn Worth of Petrol, Says NNPC

The Nigerian National Petroleum Corporation on Tuesday said it had imported 9.8 million metric tonnes of Premium Motor Spirit, popularly known as petrol, worth $5.8bn to combat the fuel crisis that resurfaced late last year.

The Group Managing Director, NNPC, Maikanti Baru, disclosed this at a public hearing organised by the Senate Committee on Public Accounts at the National Assembly Complex in Abuja.

But despite Baru’s claim, the queues for petrol in the Federal Capital Territory and neighbouring states grew longer on Tuesday.

In a presentation by the GMD, who was represented by the Chief Operating Officer, Finance and Accounts, Abdulrazaq Isiaka, the oil firm stated that it carried out the massive importation in fulfilment of its statutory role as supplier of last resort to ensure that Nigerians would not suffer as a result of product unavailability.

Baru was quoted in a statement issued by the spokesperson of the NNPC, Ndu Ughamadu, as saying that the provision of 9.8 million metric tonnes of petrol had helped a great deal in ameliorating the suffering of Nigerians.

He said the corporation’s intervention became necessary following the inability of the major and independent marketers to import the product because of the high landing cost, which made cost recovery and profitability difficult owing to the regulated price regime.

The GMD, however, pointed out that cross-border smuggling due to price disparity between Nigeria and neighbouring countries, where a litre of petrol was selling above N350 per litre as well as logistics in trucking products to different locations across the country, remained serious challenges in the quest for no queue situation in the country.

The Chairman, Senate Committee on Public Accounts, Senator Matthew Uroghide, noted that the public hearing was part of the committee’s duty to find lasting solutions to the problem of fuel scarcity in order to make life easy for all Nigerians.

Meanwhile, the National Bureau of Statistics on Tuesday released the Petroleum Products Importation Report for 2017, with the country said to have imported 17.31 billion litres of Premium Motor Spirit or petrol in the period.

The bureau stated in the report that was made available to our correspondent in Abuja that 4.28 billion litres of Automotive Gas Oil, 340.33 million litres of household kerosene, 592.73 million litres of Aviation Turbine Kerosene and 15.61 million litres of Low Pour Fuel Oil were imported into the country in 2017.

The report stated that the months of July and August recorded the highest volumes of PMS imported into the country at 1.88 billion litres, while the highest volume of AGO and household kerosene were imported in March and April 2017, respectively.

The report read in part, “The petroleum products’ importation statistics for 2017 reflected that 17.31 billion litres of Premium Motor Spirit, 4.28 billion litres of Automotive Gas Oil, 340.33 million litres of household kerosene, 592.73 million litres of Aviation Turbine Kerosene and 15.61 million litres of Low Pour Fuel Oil were imported into the country in 2017.

“State-wide distribution of truck-out volume for 2017 showed that 18.36 billion litres of Premium Motor Spirit, 4.75 billion litres of Automotive Gas Oil, 944.39 million litres of household kerosene, 554.61 million litres of Aviation Turbine Kerosene and 127.42 million litres of Low Pour Fuel Oil were distributed nationwide during the period under review.”

The NBS had in the PMS price watch released last week stated that on the average, Nigerians paid the sum of N190.9 per litre to buy petrol in January.

This, is about N46 per litre higher than the official pump price of the product.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Growth Forecast Lowered to 3% for 2025, Higher than Most Emerging Markets

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The International Monetary Fund (IMF) has projected a 3% growth rate for Nigeria in 2025, slightly down from the 3.1% forecasted for 2024.

Despite this slight decline, Nigeria’s projected growth remains higher than that of many emerging markets as detailed in the IMF’s latest World Economic Outlook released on Tuesday.

In comparison, South Africa’s economy is expected to grow by 1.2% in 2025, up from 0.9% this year. Brazil’s growth is projected at 2.4% from 2.1% in 2024, and Mexico’s growth forecast stands at 1.6% for 2025, down from 2.2% in 2024.

However, India is anticipated to see a robust growth of 6.5% in 2025, although this is slightly lower than the 7% forecast for 2024.

The IMF’s projections come as Nigeria undertakes significant monetary reforms. The Central Bank of Nigeria has been working on clearing the foreign exchange backlog, and the federal government recently removed petrol subsidies.

These reforms aim to stabilize the economy, but the country continues to grapple with high inflation and increasing poverty levels, which pose challenges to sustained economic growth.

Sub-Saharan Africa as a whole is expected to see an improvement in growth, with projections of 4.1% in 2025, up from 3.7% in 2024. This regional outlook indicates a modest recovery as economies adjust to global economic conditions.

The IMF report underscores the need for cautious monetary policy. It recommends that central banks in emerging markets avoid easing their monetary stances too early to manage inflation risks and sustain economic growth.

In cases where inflation risks have materialized, central banks are advised to remain open to further tightening of monetary policy.

“Central banks should refrain from easing too early and should be prepared for further tightening if necessary,” the report stated. “Where inflation data encouragingly signal a durable return to price stability, monetary policy easing should proceed gradually to allow for necessary fiscal consolidation.”

The IMF also highlighted the importance of avoiding fiscal slippages, noting that fiscal policies may need to be significantly tighter than previously anticipated in some countries to ensure economic stability.

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Nigeria’s Inflation Rises to 34.19% in June Amid Rising Costs

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Food Inflation - Investors King

Nigeria’s headline inflation rate surged to 34.19% in June 2024, a significant increase from the 33.95% recorded in May.

This rise highlights the continuing pressures on the nation’s economy as the cost of living continues to climb.

On a year-on-year basis, the June 2024 inflation rate was 11.40 percentage points higher than the 22.79% recorded in June 2023.

This substantial increase shows the persistent challenges faced by consumers and businesses alike in coping with escalating prices.

The month-on-month inflation rate for June 2024 was 2.31%, slightly up from 2.14% in May 2024. This indicates that the pace at which prices are rising continues to accelerate, compounding the economic strain on households and enterprises.

A closer examination of the divisional contributions to the inflation index reveals that food and non-alcoholic beverages were the primary drivers, contributing 17.71% to the year-on-year increase.

Housing, water, electricity, gas, and other fuels followed, adding 5.72% to the inflationary pressures.

Other significant contributors included clothing and footwear (2.62%), transport (2.23%), and furnishings, household equipment, and maintenance (1.72%).

Sectors such as education, health, and miscellaneous goods and services also played notable roles, contributing 1.35%, 1.03%, and 0.57% respectively.

The rural and urban inflation rates also exhibited marked increases. Urban inflation reached 36.55% in June 2024, a rise of 12.23 percentage points from the 24.33% recorded in June 2023.

On a month-on-month basis, urban inflation was 2.46% in June, slightly higher than the 2.35% in May 2024. The twelve-month average for urban inflation stood at 32.08%, up 9.70 percentage points from June 2023’s 22.38%.

Rural inflation was similarly impacted, with a year-on-year rate of 32.09% in June 2024, an increase of 10.71 percentage points from June 2023’s 21.37%.

The month-on-month rural inflation rate rose to 2.17% in June, up from 1.94% in May 2024. The twelve-month average for rural inflation reached 28.15%, compared to 20.76% in June 2023.

The rising inflation rates pose significant challenges for the Central Bank of Nigeria (CBN) as it grapples with balancing monetary policy to rein in inflation while supporting economic growth.

The ongoing pressures from high food prices and energy costs necessitate urgent policy interventions to stabilize the economy and protect the purchasing power of Nigerians.

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Inflation to Climb Again in June, but at a Reduced Pace, Predicts Meristem

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Nigeria's Inflation Rate - Investors King

As Nigeria awaits the release of the National Bureau of Statistics’ report on June 2024 inflation, economic analysts project that while inflation will continue its upward trajectory, the pace of increase will moderate.

This comes after inflation rose to a 28-year high of 33.95% in May, up from 33.69% in April.

Meristem, a leading financial services company, has forecasted that June’s headline inflation will rise to 34.01%, a slight increase from May’s figure.

The firm attributes this persistent inflationary pressure to ongoing structural challenges in agriculture, high transportation costs, and the continuous depreciation of the naira.

Experts have highlighted several factors contributing to the inflationary trend. Insecurity in food-producing regions and high transportation costs have disrupted supply chains, while the depreciation of the naira has increased importation costs.

In May, food inflation grew at a slower pace, reaching 40.66%, but challenges in the agricultural sector, such as the infestation of tomato leaves, have led to higher prices for staples like tomatoes and yams.

Meristem predicts that food inflation will persist in June, driven by these lingering challenges. Increased demand during the Eid-el-Kabir celebration and rising importation costs are also expected to keep food prices elevated.

Core inflation, which excludes volatile items like food and energy, was at 27.04% in May. Meristem projects it to rise to 27.30% in June.

The firm notes that higher transportation costs and the depreciation of the naira will continue to push core inflation up.

However, they also anticipate a month-on-month moderation in the core index due to a relatively stable naira exchange rate during June, compared to a more significant depreciation in May.

Cowry Assets Management Limited has projected an even higher headline inflation figure of 34.25% for June, citing similar concerns.

The firm notes that over the past year, food prices in Nigeria have soared due to supply chain disruptions, currency depreciation, and climate change impacts on agriculture.

This has made basic staples increasingly unaffordable for many Nigerians, stretching household budgets.

As inflation continues to rise, analysts believe the Central Bank of Nigeria (CBN) will likely hike the benchmark lending rate again.

The CBN’s Monetary Policy Committee (MPC) has raised the Monetary Policy Rate (MPR) by 650 basis points this year, bringing it to 26.25% as of May 2024.

At a recent BusinessDay CEO Forum, CBN Governor Dr. Olayemi Cardoso emphasized the MPC’s commitment to tackling inflation, stating that while the country needs growth, controlling inflation is paramount.

“The MPC is not oblivious to the fact that the country does need growth. If these hikes hadn’t been done at the time, the naira would have almost tipped over, so it helped to stabilize the naira. Interest rates are not set by the CBN governor but by the MPC committee composed of independent-minded people. These are people not given to emotion but to data. The MPC clarified that the major issue is taming inflation, and they would do what is necessary to tame it,” Cardoso said.

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