Business
Oil rises to $76 as OPEC+ postpones production supply decision
Crude oil prices rose on Monday ahead of another meeting of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) for possible agreement on a gradual production increase.
Brent crude, the international benchmark, traded at $76.44 per barrel at noon on Monday with a 0.34 per cent increase.
The US West Texas Intermediate (WTI) crude also went up by 0.39 per cent to $75.45.
On Thursday, members of OPEC+ were reportedly expected to agree to a deal backed by Saudi Arabia and Russia that would further unwind previously agreed output curbs by allowing production to rise by 400,000 barrels per day every month from August to December — putting an additional two million barrels per day of crude into the market over the remainder of 2021.
The deal would also extend the duration of broader cuts that the group agreed to in 2021.
However, the United Arab Emirates (UAE) objected to the plan.
Reports said the UAE “unconditionally” supported an increase in production. But the country said the extension should be conditional on revising the so-called baseline, which determines how much a country is allowed to pump.
The UAE wants its baseline to be revised before extending those cuts till end of 2022, because it wants to produce more than it is now allowed based on the quota of its current baseline.
All OPEC+ agreements require unanimous approval.
The meeting was postponed to Friday but members failed to reach an agreement on its output policy and agreed to meet again on Monday (today).
Oil prices have surged more than 45 per cent in the first six months of 2021, with demand rising as global economies reopened.
“The issue is putting a condition on that increase, which is the extension of the agreement,” Suhail Al Mazrouei told CNBC’s Hadley Gamble, adding that the current proposal simply “wasn’t a good deal” for the UAE.
The current baseline set for the UAE was taken from October 2018, when it was producing around 3.2 million barrels a day. Last year, the number jumped to 3.8 million barrels per day
Business
Naira loses N81 to dollar in one day
Naira loses N81 to dollar in one day
The naira lost N81.34 against the US dollar at the foreign exchange market on Thursday
FMDQ data showed that the naira fell to N1,154.08 per dollar on Thursday from N1,072.74 on Wednesday.
This represents a 7.04 per cent loss against the dollar compared to N1,072.74 per dollar traded the previous day.
At the parallel market, the naira also depreciated N1,100 per dollar on Thursday from N1, 040 on Wednesday.
This is the second time the naira would be depreciating against the dollar in three days amid fears of depleting foreign exchange reserves.
Nigeria’s foreign reserves dropped to $32.29 billion as of April 15.
Business
Govt paying N600bn for fuel subsidy monthly — Rainoil CEO
Govt paying N600bn for fuel subsidy monthly — Rainoil CEO
The CEO of Rainoil Limited, Gabriel Ogbechie, has claimed that the federal government resumed the payment of the controversial fuel subsidy following the devaluation of the Naira in the foreign exchange market.
Ogbechie made this statement on Tuesday during the Stanbic IBTC Energy and Infrastructure Breakfast Session held in Lagos.
He pointed out that with Nigeria’s daily fuel usage at 40 million liters and the foreign exchange rate at N1,300, the government’s subsidy per liter of fuel falls between N400 and N500, culminating in a monthly total of approximately N600 billion.
He said; “When Mr. President came in May last year, one of the things he said was that Subsidy is gone. And truly, the subsidy was gone, because immediately the price of fuel moved from 200 to 500 per liter. At that point truly, subsidy was gone.
“During that period, Dollar was exchanging for N460, but a few weeks later, the government devalued the exchange rate. And Dollar moved to about N750. At that point, subsidy was beginning to come back.
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“The moment the two markets officially closed, officially the market went to about N1,300. At that point, that conversation was out of the window. Subsidy was fully back on petrol. If you want to know where petrol should be, just look at where diesel is. Diesel is about N1,300 and petrol is still selling for N600.
Furthermore, he said that NNPC being the only petrol importer in the country implies that there is an ongoing subsidy, as prices had to be fixed.
Earlier yesterday, the former governor of Kaduna State, Nasir El Rufai, said the federal government is spending more on petrol subsidy than before.
In addition, the Special Adviser to the President on Energy, Mrs. Olu Veŕheijen, said that the Federal Government reserves the right to pay fuel subsidy intermittently to cushion hardship in the country.
“The subsidy was removed on May 29. However, the government has the prerogative to maintain price stability to address social unrest. They reserve the right to intervene.
“If the government feels that it cannot continue to allow prices to fluctuate due to high inflation and exchange rates, the government reserves the right to intervene intermittently and that does not negate the fact that subsidy has been removed,” she said.
Govt paying N600bn for fuel subsidy monthly — Rainoil CEO
Business
Breaking: Dangote brings diesel price down to N1000/litre
Breaking: Dangote brings diesel price down to N1000/litre
Dangote Petroleum Refinery has announced a further reduction in the price of diesel.
When it commenced operation a few weeks ago, Dangote Petroleum Refinery pegged the price of diesel as N1,200.
While rolling out the products, the refinery supplied at a substantially reduced price of N1,200 per litre three weeks ago, representing over 30 percent reduction from the previous market price of about N1,600 per litre.
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However, on Tuesday, a further reduction of N200 was noticed in the price, with the product now pegged at N1,000.
This significant reduction in the price of diesel, at Dangote Petroleum Refinery, is expected to positively affect all the spheres of the economy and ultimately reduce the high inflation rate in the country.
The President of Dangote Group, Aliko Dangote, had during the Eid-el-Fitr celebration said if the cost price of diesel comes down, the inflation rate will be substantially reduced.
Dangote spoke when he visited President Bola Tinubu in his residence in Lagos State to celebrate the end of the Ramadan fast with him.
Breaking: Dangote brings diesel price down to N1000/litre
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