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

Breaking: Dangote brings diesel price down to N1000/litre

Dangote Petroleum Refinery has announced a further reduction in the price of diesel.

Naira records five-month highest gain, sells below N1000/$ at parallel market

The naira continued its positive showing against the United States dollar on Monday, selling below N1000/$ in some segments of the parallel market.

Newstrends reports that the Federal Government, groups and some individuals have mounted a spirited campaign for those hoarding the dollars to push them out as naira continues to appreciate.

On Monday, the naira was offered in some parts of Lagos and Abuja between N995 and N1,050 per dollar in the parallel market. It was N1,230/$ on Friday.
The latest gain, being over five-month highs, came in the wake of the Iranian attack on Israel and a rise in the crude oil price.
Goldman Sachs, American investment bank economists, had earlier predicted that the naira’s bullish momentum on the foreign exchange market would likely cause it to trade for less than N1,000 per US dollar in the coming months.
According to a report by Nairametrics, the group claimed that the rally in Nigerian currency helped recover from large losses after two devaluations since last June by being bolstered by capital inflows and successive interest rate hikes.
In March, Goldman Sachs projected that the Naira would appreciate to N1,200 per dollar in 2024.

At the official foreign exchange market, the rate was put at N1,136/$ in contrast with N1,205/$ last Friday.

The top bank has implemented several policy initiatives in recent months to bring stability to the foreign exchange market.
The CBN increased interest rates to 24.75% at the most recent meeting of the Monetary Policy Committee (MPC), which helped it recover losses from the two devaluations that occurred since June of last year.
Further gains for the naira result from the CBN’s ongoing intervention, which involves selling foreign exchange to Bureau De Change operators at a revised rate.
The market anticipates higher inflows of US dollars from the sale of foreign currency bonds in the second quarter as disclosed by Finance Minister Wale Edun.

The Federal Government has just offered high-yield short-term debt products at a premium to entice overseas capital into the economy.

The Middle East’s geopolitical unrest and
Notwithstanding a drop in Nigeria’s production volume, crude oil prices have risen beyond $90.

Nigerian grades of oil are trading at a premium to the ICE Brent benchmark.

The Middle East’s geopolitical unrest and the anticipation of an Iranian government strike on Israel caused oil prices to soar.