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
Oil prices rose more than 2 per cent on Thursday amid supply concerns after the US President, Mr Donald Trump, revoked a licence granted to US oil major, Chevron, to operate in Venezuela.
The news led Brent crude oil futures to spike by $1.53 or 2.1 per cent to $74.06 a barrel while the US West Texas Intermediate (WTI) crude oil futures increased by $1.64 or 2.4 per cent to $70.26.
The Chevron licence revocation means the company will no longer be able to export Venezuelan crude.
However, if Venezuelan state oil company, PDVSA, exports oil previously exported by Chevron, US refineries will be unable to buy it because of U.S. sanctions.
President Trump said this was due to the lack of electoral reform in the South American country alongside with insufficient action on migration.
Chevron has been exporting around 240,000 barrels of Venezuelan crude to the US daily after former US President Joe Biden granted them a waiver.
The amount constitutes around 25 per cent of the country’s total oil production and generates substantial revenues that stay in the Venezuelan economy.
Meanwhile, market analysts noted that the move could also lead to the negotiation of a fresh agreement between the Chevron and PDVSA to export crude to destinations other than the US.
This development could also impact the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, to which Venezuela is a member.
Chevron’s exit could reduce Venezuela oil’s production, giving OPEC+ capacity to increase output.
However, investors were still keeping an eye on signs of a potential peace deal in Ukraine, which could result in higher Russian oil flows.
President Trump said Ukrainian President Volodymyr Zelenskiy will visit the US on Friday to sign an agreement on rare earth minerals.
However, the Ukrainian leader said the success of talks would hinge on continued US aid.
The market was pressured by news that US economic growth slowed in the fourth quarter amid cold weather and concerns that tariffs will hurt spending through higher prices.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, February 26 with the Unlisted Security Index (NSI) static at 3,268.81 points and the market capitalization unchanged at N1.851 trillion.
The alternative stock exchange closed flat at midweek despite recording six price movers, with two in the green region and four in the red territory.
On the gainers’ side Afriland Properties Plc and FrieslandCampina Wamco Nigeria Plc, with the former rising by N1.12 to N22.80 per unit from the preceding day’s N21.68 per unit and the latter expanding by 76 Kobo to settle at N39.86 per share compared with Tuesday’s closing price of N39.10 per share.
However, First Trust Microfinance Bank Plc lost 5 kobo to close at 47 Kobo per unit compared with the previous day’s 52 Kobo per unit, Geo Fluids dropped 34 Kobo to settle at N3.58 per share versus the preceding session’s N3.24 per share, UBN Property Plc went down by 10 Kobo to finish at N1.75 per unit, in contrast to Tuesday’s closing price of N1.85 per unit, and Central Securities Clearing System (CSCS) Plc declined by 14 Kobo to close at N22.01 per share versus N22.15 per share.
During yesterday’s session, the volume of securities transacted by investors jumped by 99.3 per cent to 1.2 million units from the 605,399 units transacted in the previous trading day.
However, the value of transactions slid by 28.5 per cent to N10.6 million from N14.8 million, while the number of deals went up by 58.3 per cent to 38 deals from 24 deals recorded on Tuesday.
At the close of business, Impresit Bakolori Plc was the most active stock by value (year-to-date) with 533.8 million units worth N520.9 million, followed by Afriland Properties Plc with 16.4 million units valued at 335.2 million, and FrieslandCampina Wamco Nigeria Plc with 8.3 million units valued at N329.2 million.
Industrial and General Insurance (IGI) Plc ended the most active stock by volume on a year-to-date basis with 69.7 million units worth N23.6 million, trailed by Geo-Fluids Plc with 10.9 million units sold for N51.9 million, and FrieslandCampina Wamco Nigeria Plc with 8.3 million units valued at N329.2 million.
By Adedapo Adesanya
The Naira closed flat on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, February 26 at N1,501.95/$1.
Also, the value of the local currency against the Pound Sterling and the Euro remained unchanged in the official market during the session at N1,894.72/£1 and N1,570.11/€1 apiece.
However, the Nigerian currency depreciated against the United States currency by N10 at midweek to quote at N1,500/$1, in contrast to the preceding day’s N1,490/$1.
The outcome of the local currency comes amid ease in the wider economy and recent moves like clearing backlogs, which have led to the country’s foreign reserves losing over $2 billion in the last month.
However, market analysts fear that the continued drop in the foreign reserves may only offer temporary respite to the Naira.
In the cryptocurrency market, most of the tokens fell on Wednesday after the US President, Mr Donald Trump, said he plans to impose a 25 per cent tariff on the European Union (EU) during his first cabinet meeting.
The price of Bitcoin (BTC) depreciated by more than 3 per cent in the last 24 hours to close at $85,878.47.
After the recent market selloff, there were calls that the drop might have been the bottom but Mr Trump’s EU tariff plans seem to have dampened market optimism.
The American President claimed that the 27-member union does not accept US cars and farm products while the US buys from the bloc.
On its part, the EU said it will react firmly and immediately against “unjustified barriers to free and fair trade”
Ethereum (ETH) slumped by 5.9 per cent to $2,341.69, Ripple (XRP) went down by 3.7 per cent to $2.20, Cardano (ADA) fell by 2.9 per cent to trade at $0.6625, Dogecoin (DOGE) depreciated by 1.3 per cent to $0.2076, Binance Coin (BNB) weakened by 1.2 per cent to $614.13, and Solana (SOL) declined by 1.0 per cent to $140.03.
But Litecoin (LTC) recorded a 6.9 per cent appreciation to quote at $126.46, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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