Prices of goods imported into the U.S fell in August by the most in 6 months.
U.S import prices decreased by 0.2 percent in August after gaining 0.1 percent in July. Making it the first drop since February, according to the Labor Department on Wednesday.
Economists had forecast import prices slipping 0.1 percent in August. In the 12 months through August, import prices fell 2.2 percent, the smallest decrease since October 2014, after declining 3.7 percent in July.
Import prices have been constrained by a strong dollar and cheap oil. That, together with sluggish wage growth have left inflation persistently running below the Fed’s 2 percent target.
August’s weak inflation reading added to a slowdown in job growth and soft manufacturing and services sectors surveys in reducing the likelihood of an interest rate hike at the Fed’s Sept. 20-21 policy meeting.
Fed Governor Lael Brainard said on Monday she wanted to see stronger consumer spending data and signs of rising inflation before raising interest rates.
The U.S. central bank lifted its benchmark overnight interest rate at the end of last year for the first time in nearly a decade, but has held it steady since amid concerns over persistently low inflation.
Last month, imported petroleum prices declined 2.8 percent after decreasing 3.6 percent in July. Import prices excluding petroleum were unchanged after climbing 0.5 percent in July.
Prices for imported capital goods were unchanged, while the cost of imported automobiles fell 0.2 percent. Imported consumer goods prices excluding automobiles slipped 0.1 percent and the cost of imported food decreased 0.5 percent last month.
The report also showed export prices fell 0.8 percent in August. That was the biggest drop since January and followed a 0.2 percent increase the prior month. Export prices were down 2.4 percent from a year ago.
FG Reduces Expenditure on JV Oil Assets by 62%
NNPC Lowers Spending on JV Oil Assets as Demand Drops
In a bid to reduce expenditure following a plunge in revenue generation, the federal government has cut down on spending on oil and gas assets currently being developed through a joint venture with private companies.
Federal Government lowered its expenses by 61.83 percent in the month of July, according to the latest report from the Nigerian National Petroleum Corporation.
The report showed NNPC, which has an obligation to make cash call payment for the development of the assets, only made $94.84 million or N34.14 billion cash call in July, down from $248.48 million or N89.45 billion in June.
The joint venture is managed by both the NNPC and private firms in proportion to their equity holdings and receives produced crude oil the same ratio.
This was largely due to the plunge in NNPC’s export receipt from $378.42 million in June to $122.44 million during the month under review.
“Of the export receipts, $67.45m was remitted to the Federation Account while $54.98m was remitted to fund the JV cost recovery for the month of July 2020 to guarantee current and future production,” it added.
In addition to the dollar allocation of $54.98 million to the JV cash call account, the naira portion of N14.35bn ($39.86m) was transferred to the account from domestic crude oil receipts in July, according to the NNPC.
Nigeria: Bread Scarcity Rages As Bakers Strike in Lagos, Abuja Over Price Hikes
Post Covid-19 Economy in Nigeria Sees Scarcity And Price hike in Bread Production
Residents of Abuja and Lagos are lamenting the increased scarcity in bread and a hike in its price as bakers went on strike to protest the hike in price of flour and other ingredients.
“I have asked around for bread but I can’t find any, and this is strange,” said Amos Idoko, a resident of Utako area in Abuja.
The strike affected roadside kiosk operations and families who rely on bread for a breakfast staple with many running out of bread last weekend across some communities surveyed in the FCT, Nasarawa and Niger state.
Some of the bakers said the strike started Friday and may end today, but there will be a hike in the price of bread.
A leader of the bakers group in the FCT and an official of Zuma Bread in Abuja, Abdullahi Muhammed, said the strike action was to protest the hike of flour and other ingredients for bread making.
Daily Trust reported exclusively recently that foreign-dominated flour millers have increased the price of flour for more than three times between March and August 2020, even with the COVID-19 pandemic.
“For instance, a bag of wheat flour sold between N10,000 and N12,000 last year now sells for N14,000,” he said
“Bag of sugar sold for about N11,000 last year now sells at N18,000. A 25-litre cooking oil previously N8,000 is now N15,000,” he said.
A dealer in wheat flour and baking ingredients in Kubwa – Abuja, Shehu Lawan, said dealers now rely on the parallel market to source for forex instead of the Central bank of Nigeria (CBN), making it difficult for them to maintain previous prices.
Lawan also said other issues that affect cost in bakery commodities, include government tax increment, cost of transport, among others.
In Lagos, Mr Ajao Ismail, who works at Royal Bite bakery in Palm Avenue of Mushin, said there was an earlier scarcity of bread in Lagos but that most bakers have resumed operations as of Sunday evening but with the bread price increasing.
“The market is dull at the moment because we have lots of bread that we have not sold. When there was scarcity, the demand was higher than the supply, now that most of the bakers are no longer on strike, there is more bread. People are reacting to the price.”
Ajao explained that the price of bread can return to how it was pre-COVID provided the government intervenes.
“If the government can work towards ensuring the price of flour, sugar, milk and butter is reduced to what it was in January 2020, we promise to reverse the price of bread to what it was.
“Bread now sold for N300/350 will return to N250 and the one sold for N500 will return to N400,” she noted.
The bakers had shut down for a number of days last week in Lagos. Premium Bread makers Association of Nigeria (PBAN) and Association of Master Bakers and Caterers Association of Nigeria (AMBAN) in briefing said the prices of ingredients
The spokesperson of PBAN, Emmanuel Onuoha, confirmed the scarcity. “If we don’t do this, people will think it is their right to buy cheap bread,” he said, adding that bakers now run at a loss even as most of them could no longer meet their loan repayment obligations.
It was also learnt that other states might also embark on the temporary cessation of production in response to the high cost of baking ingredients comprising flour, sugar, margarine, among others.
FG Spends N10 Trillion on Petrol Subsidy in 14 Years – NNPC
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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