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Economy

Nigeria Inflation Jumps 17.1 Percent in July

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Inflation

Cost of goods and services in Nigeria continued to rise after several measures by the Central Bank of Nigeria to ease the economic gridlock in the nation and boost capital importation needed to offset the shortfall created by forex scarcity.

The consumer price index which measures inflation rate increased by 17.1 percent year-on-year in July, the National Bureau of Statistics reported. This is 0.6 percent higher than 16.5 percent recorded in the preceding month, and the highest in over 11 years.

According to the National Bureau of Statistics, “increases were recorded in all COICOP divisions which contribute to the headline index reflecting higher prices across the economy. The pace of the increase in the headline index was however weighed upon by a slower increase in three divisions; Health, Transport, and Recreation and Culture divisions.”

The gauge of food rose 15.8 percent on a yearly basis in July — 0.5 percent lower from what was obtained in June.

“Prices however increased at a slower pace across a few groups within the Food sub-index namely Milk, Cheese and Eggs; Oils and Fats; and Fruits. In addition, imported foods as reflected by the Imported Food Sub-index increased by 0.4% points from June to 20.5% in July.”

However, prices from the energy sector continue to be the largest increases reflected in the Core sub-index. In the month under review, the Core sub-index rose 0.7 percent to 16.9 percent from 16.2 percent recorded in June.

On a monthly basis, the headline index increased, albeit at a slower pace for the second consecutive month in July.

The index surged by 1.3 percent in July, 0.4 percent from 1.7 percent recorded in June.

 

 

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.

Economy

FG Spends N10 Trillion on Petrol Subsidy in 14 Years – NNPC

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NNPC Says FG Has Spent N10 Trillion on Petrol Subsidy in the Last 14 years

The Nigerian National Petroleum Corporation said the Federal Government spent a total sum of N10 trillion on petrol subsidy between 2006 and 2020.

This was disclosed on Saturday by Mele Kyari, the Group Managing Director, NNPC, during an interview on Liberty FM, Kaduna.

According to the NNPC boss, the federal government removed petrol subsidy because of the fraud perpetrated by some cabals in the oil industry.

He said the beneficiaries of petrol subsidies were marketers who smuggled federal government subsidised product into neighbouring countries for bigger gains.

The NNPC boss said these marketers made more profits by producing fake documents to collect subsidy for fuel they never imported or sold.

He said, “The crude oil is a global commodity and its price is not hidden. Everyone can calculate and know how much the cost of every final product from the crude at international market is.

“Since the inception of the country, the government has been paying subsidy on petrol to make it cheaper for Nigerians to buy below the cost price.

“This subsidy is designed to assist the masses of Nigeria; that is the intention, but in reality, the masses are not the beneficiaries. First, the masses are not the owners of the exotic cars buying fuel, owning the filling stations and doing the oil business.

“This subsidy that the government has been paying over the years is the root of all the atrocities and fraud committed in this country.

“If you look at it from 2006 till 2020, we have spent over N10tn on fuel subsidy. Apart from that, there is also subsidy on foreign currencies. Everybody knows how much is dollar in the market, but government is also subsidising it. So, this and the fuel subsidy within this period is around N14tn to N15tn.

“What was happening with the subsidy is that, some marketers were smuggling fuel to other neighbouring countries because it was cheaper in Nigeria due to the subsidy.

“Another one is those who use fake documents and bring to government to collect subsidy for fuel they never imported and the previous government was paying them.

“So, it was not the masses of Nigeria that were enjoying this subsidy except some cabals, who are rich and powerful.”

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Economy

Nigeria’s Oil Sales Revenue Plunges by 75 Percent

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Oil Sales Revenue Declined by 75 Percent to $55.29 Million

Nigeria’s oil revenue plunged by 74.89 percent in July, according to the latest report from the Nigerian National Petroleum Corporation (NNPC).

Oil sales revenue declined to $55.29 million in the month under review, down from $219.58 million recorded in June and $120.50 million in May.

The record fall in global oil prices and demand due to COVID-19 plunged Nigeria’s crude oil sales from $336.65 million posted in January to $281.14 million in February, $184.59 million in March and $148.86 million in April.

This was after Brent Crude oil, against which Nigerian crude oil is priced, plunged to as low as $15.98 per barrel in April, down from $70 per barrel it was sold in January.

Oil and gas constitute 50 percent of the Nigerian government revenues and over 90 percent of export earnings despite accounting for just about 10 percent of the nation’s GDP.

A total export sale of $84.63m was recorded in July 2020, decreasing by 66.95 per cent compared to last month. Crude oil export sales contributed $55.29m (65.34 per cent) of the dollar transactions compared with $219.58m contribution in the previous month,” the NNPC said in its latest monthly report.

NNPC said gas exported in the month stood at $29.33 million.

July 2019 to July 2020 crude oil and gas transactions indicated that crude oil and gas worth $3.91bn was exported,” it added.

According to the report, the federation crude oil and gas lifting are broadly classified into equity export and domestic, and are lifted and marketed by the NNPC while the proceeds remitted into the Federation Account.

It said, “Equity export receipts, after adjusting for joint venture cash calls, are paid directly into Federation Account domiciled in the Central Bank of Nigeria.”

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Economy

Rivers State Partners Shell Nigeria on Assa North Gas Project

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Oil downturn

Rivers State, Shell Nigeria Partner on Assa North Gas Project

Rivers State and the Shell Petroleum Development Company of Nigeria Limited (SPDC) have partnered to build SPDC’s Assa North Gas project, with a capacity of 300 million standard cubic feet of gas per day.

According to the people familiar with the project, it has the potential to be one of the largest domestic gas projects in Nigeria when completed.

Mr. Eloka Tasie-Amadi, the State Commissioner for Chieftaincy and Community Affairs, who spoke at the inauguration event, urged the comrade Orikoha Ekwueme-led newly elected officials of the Cluster Development Board to use the opportunity of leadership to make positive impacts that will improve living standards in their communities.

The state government is always available to support you. Always speak with your people, including the Community Trust Committees (which were also newly inaugurated). Adequate communication will ensure the buy-in of all your stakeholders.

“Leadership is more of sacrifice; not an opportunity for personal benefit”, he said.

Also, speaking was Mr Igo Weli, the General Manager External Relations, SPDC, said, “The Global Memorandum of Understanding (GMoU), that you signed today, sets the framework for a long-term partnership between SPDC JV and the Egi/Igburu Cluster. The GMoU runs on the principle of community-led development. Today, SPDC JV commits to providing funding to help you realise your community development aspirations.

Represented at the ceremony by SPDC External Relations Manager for Projects and Opportunities, Dr Banji Adekoya, he asked the CDB to “be prudent and implement projects and programmes that will deliver maximum benefits to the Egi/Igburu communities. Note that government, SPDC JV, and the communities that you represent will hold you accountable for the judicious utilisation of the development funds.”

“With the inauguration, SPDC reiterates the company’s commitment to the Assa North Gas Project and to making it an exemplary one, particularly in Nigeria’s quest for energy sufficiency, for power generation and industrialisation,” he said.

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