Business

Fuel subsidy removal may push more people into poverty, KPMG warns

Published

2 years ago

June 7, 2023

Fuel subsidy removal may push more people into poverty, KPMG warns

A multinational audit, tax and advisory services firm, KPMG, has predicted that the removal of petrol subsidy in Nigeria could see the inflation rate climb to 30 per cent from June.

Indeed, it warned in its latest report that the precarious situation could push more people into poverty unless compensating measures are put in place with effective communication to mitigate its effects on the people.

Removal of petrol subsidy was one of the highlights of President Bola Tinubu’s inaugural address on May 29. The announcement was followed by increase in petrol price by the Nigerian National Petroleum Company (NNPC) Limited.

The price hike elicited quick reactions from the organised labour which accused the government of failing to engage in necessary consultations before removing the subsidy.

The KPMG report stated that the removal of fuel subsidies would result in a temporary increase in inflation, which was at 22.22 per cent, as at April 2023.

It said its prediction aligned with the World Bank projection that a one-off adjustment would lead to higher inflation in 2023 and 2024, and lower thereafter.

KPMG stated, “Our internal macro model also supports the World Bank’s findings with a forecast of an increase of about six per cent over June 2023 inflation rate to bring it to about 30 per cent.

“In mid-2024, however, all other things remaining constant, and as year-on-year base effects kick in, the pace of inflation will drop significantly, though overall prices of goods and services will remain elevated.”

According to the firm, the capacity of the Central Bank of Nigeria (CBN) to manage inflationary pressures through effective monetary policy would be a major factor in halting the inflationary pressures.

However, KPMG stated that the CBN, like monetary authorities in other parts of the world, was struggling to contain runaway inflation while there were legitimate questions regarding the efficacy of interest rate hikes to contain inflation.

It stated, “However, for gradual or immediate deregulation to be effective, several conditions will have to be met, vis-a-vis establishing a robust and sustainable market for eligible importers to access, on a non-discriminatory basis, sufficient supply foreign exchange liquidity at the same rate for all eligible fuel suppliers.

“This will require significant and far-reaching reforms to CBN’s current approach to foreign exchange management to enhance supply of FX and bring down the parallel market rate.”

The organisation said a robust coordination with the states as well as with the fiscal authorities and the CBN in managing the monetary aspects of deregulation and subsidy removal was vital.

KPMG also warned that without foreign exchange reforms and an elimination of the gap between the official and parallel exchange rate, the reforms would not work.

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NADDC DG hails Kojo Motors for establishing CNG conversion centre in Owerri

Published

7 hours ago

March 21, 2025

Trends Admin

NADDC DG hails Kojo Motors for establishing CNG conversion centre in Owerri

Kojo Motors has partnered the National Automotive Design and Development Council (NADDC) in setting up the vehicle Compressed Natural Gas conversion centre in Owerri, lmo State.

Director-General of the NADDC, Joseph Osanipin, during an empowerment and awareness summit on Wednesday, March 19, 2025, commended the auto firm for the monumental project.

“Today, we are gathered here for Compressed Natural Gas (CNG) Empowerment and Awareness Summit 2025 with the theme ‘Building a youth-based nation through cleaner energy’,” he said.

Osanipin said that the the purpose of the summit was to create awareness and sensitize the public to safety, standards and regulation in the use of the CNG as a better alternative source of energy for mobility.

NADDC, he said, was equipping technicians with the knowledge, skills and competencies required to safely and efficiently convert vehicles to run on CNG.

“The Council is a parastatal of the Federal Government under the Federal Ministry of Industry, Trade and Investment,” he added.

“It has the regulatory oversight on the Nigerian Automotive Industry to initiate, recommend, supervise and regulate policies and programmes for locally manufactured vehicles and components in Nigeria.

The NADDC boss noted that the Council had worked tirelessly to ensure the survival and growth of this sector with a view to enhancing its contribution to the national economy.

As part of the CNG conversion programme, 60 technicians will be receiving hands-on training in converting vehicles to run on CNG which would run for five days from the March 17 to 21,2025.

Osanipin emphasized the importance of using certified conversion kits and specialized workshops to ensure safety during the process.

“The cylinders used in CNG vehicles are fortified, making them safer than traditional vehicle fuel tanks,” he said.

Also speaking during the event, Professor Anoka Njan, representative of the Minister of Industry Trade and Investment, praised the NADDC and Kojo Motors efforts, stating that the ministry fully supported the initiative as part of broader efforts to alleviate challenges in the auto industry and empower the youth.

Imo State Commissioner for Youth Development, Dr. Emeka Mandela Ukaegbu, who spoke at the summit on behalf of Governor Hope Uzodinma, emphasised the immense potential of the CNG in easing Nigeria’s transportation challenges and improving the economy.

“CNG offers a safer, cleaner, and cheaper alternative to the hardships many face in the country,” Dr. Madela said.

The administration is partnering with NADDC and automotive industry bodies to establish conversion workshops and CNG refilling stations across Imo State, ensuring that the state plays a key role in this important shift toward greener energy solutions.

The event marks a significant step in NADDC’s ongoing efforts to transform Nigeria’s automotive industry, making it more sustainable while creating new opportunities for skilled technicians and local communities.

Chinedu Oguegbu, Managing Director of OMAA, which is the vehicle brand promoting the petrol-powered to CNG conversion project, highlighted the economic benefits of running vehicles on CNG instead of petrol.

He listed the economic advantages to include savings up to 60 percent in the cost of fuel relative to dirtier options like diesel and petrol.

According to him, there is up to 90 percent reduction in knocks and carbon emission, and it is found to be healthier, cleaner and more environmentally friendly.

Besides savings in foreign exchange (FX) with abundance of gas locally, there is also massive resources in-country over 203 tcf of proven reserves that requires no refining and relatively lower investment for processing.

Nigeria has an estimated 15-20 million vehicles in operation that can be converted to dual-fuel or bi-fuel.

The OMAA boss reiterated the crucial need to provide an alternative to existing fuel system with the abundance of CNG as an option.

Delivering his goodwill message, Chino Ogwumike, the National Sales Manager at Kojo Motors, thanked the DG of NADDC for partnering with Kojo in this laudable project in Owerri, the heartland of the South-East of Nigeria and the government of Imo State for accepting to provide the land for building the CNG hub in the state capital.

Ogwumike stated that the flourishing automotive dealership with branches spread across the country under the visionary leadership of the founder and Executive Chairman, Ikenna Oguegbu, is strongly committed to contributing its quota towards the progress and development of Nigeria’s automotive sector and the economy.

Business

Binance delists five cryptocurrencies

Published

8 hours ago

March 21, 2025

Trends Admin

Binance delists five cryptocurrencies

Binance, the world’s largest cryptocurrency exchange, has announced the delisting of five digital assets after a routine review of their adherence to industry standards.

According to a statement released by Binance, the affected cryptocurrencies include Aergo (AERGO), AirSwap (AST), BurgerCities (BURGER), COMBO (COMBO), and Linear Finance (LINA).

The decision was based on several key factors, including trading volume, security, liquidity, the commitment of project teams, and compliance with regulatory requirements.

Key delisting details and user guidelines

Binance provided additional clarity on how the delisting process will impact its users:

Binance Futures: Positions for AERGO, LINA, and COMBO will be automatically closed and settled by March 27, 2025, at 9:00 a.m. UTC.
Binance Simple Earn & Investment Products: The affected tokens will no longer be available across these services after March 27, 2025.
Binance Convert & Trading Bots: Support for the delisted tokens will cease by March 28, 2025.

Binance also mentioned that in some instances, delisted tokens might be converted into stablecoins on behalf of users after delivery. However, the exchange clarified that this would only apply if explicitly announced.

Looking ahead, Binance revealed plans to launch a Vote to Delist feature, enabling the public to suggest assets for delisting in the future. However, the tokens mentioned in this announcement will not be eligible for the feature.

Binance delists five cryptocurrencies

Business

Air Peace slashes Nigeria-London fare by N600,000

Published

1 day ago

March 20, 2025

Trends Admin

Air Peace slashes Nigeria-London fare by N600,000

Air Peace has announced a ₦600,000 reduction in its Nigeria-London airfare for all travelers flying from Nigeria.

In a statement released on Wednesday in Lagos, the airline’s Head of Corporate Communications, Dr. Ejike Ndiulo, stated that the discount is part of Air Peace’s latest promo offer.

Passengers departing from any Nigerian city to London can enjoy significant savings, along with an exclusive one-free extra luggage allowance.