'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by ogododo: 10:45am On Sep 21, 2023 |
Despite the numerous assurances by President Bola Ahmed Tinubu that the subsidy is gone, Daily Trust’s finding shows that the federal government paid N169.4 billion as subsidy in August to keep the pump price at N620 per litre.
There have been several reports suggesting that the current price stagnation despite the worsening exchange rate and international crude price crossing $95 a barrel suggests a return of subsidy.
A document by the Federal Account Allocation Committee (FAAC), sighted by our reporter yesterday, showed that in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited. NNPC Limited used $220m (N169.4 billion at N770/$) out of the $275m to pay for the PMS subsidy. Then NNPC held back $55m, illegally.
The revelation by FAAC effectively indicates that the subsidy is back and NNPC is now taking NLNG dividends to pay the subsidy.
Former President Buhari left the country with the highest amount spent on subsidising petrol in Nigeria’s history.
According to oil and gas industry reports conducted by the Nigeria Extractive Industries Transparency Initiative (NEITI), the cost of petrol subsidy from 2015 to 2020 was N1.99 trillion.
Also reports by the Nigerian National Petroleum Corporation (NNPC) to the Federation Accounts Allocation Committee (FAAC), showed that petrol subsidy cost N1.57 trillion in 2021 alone and another N1.27 trillion from January to May 2022.
The government thereafter budgeted of N3 trillion to cover petrol subsidy costs from June 2022 to June 2023.
An aggregation of the entire costs showed that under President Buhari the government spent N7.83 trillion on petrol subsidies.
Global oil market dynamics
Brent crude crossed the $95 per barrel threshold as the value of the naira versus the US dollar hit a record low at the black market creating greater doubt about Nigeria’s elimination of petrol subsidies.
At the time this post was being written, U.S. West Texas Intermediate crude futures increased by more than 1% to $92.46 a barrel, while the international oil benchmark Brent crude futures crossed the $95 per barrel barrier.
The most recent increase in crude oil prices was expected to drive up the price of gasoline, but the FG’s decision to keep the energy product at N617/litre proved that the subsidy on Premium Motor Spirit had been quietly restored.
In addition to the rapid depreciation of the naira in Nigeria’s most accessible (black) FX market, the price cap on gasoline has made it difficult for marketers.
As of the last week of August, PMS was trading for $1,030.11 per metric tonne at the international market compared with the $859.25 it traded around July when NNPC increased the pump price to an average of N617 per litre. This shows an increase of 19.88 per cent.
The exchange rate in July was N820/$ but now N920/$, indicating a 12.19 per cent increase. The crude oil price in July was $78.50 per barrel, it traded for $88.50 per barrel in the last week of August. Yesterday, it hit the $95 mark.
Also, while the price per litre at the international market in July was $0.641, it stood at $0.792 in the last week of August. This means that the landing cost of PMS stands at about N728.64 per litre compared to the N529 it was in July.
The addition of freight costs, lightering costs (STS), distribution margin, ancillary costs by the Nigerian Midstream Downstream Regulatory Authority (NMDPRA), Nigerian Port Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) as well as marketers’ margin stands at about N90 to N105.
MOMAN, which had regularly provided a pricing update, had suspended it. A source at the organisation said there is an instruction not to share the update because the government has said there would be no price increase.
How FG planned to sustain N620 per litre
The $3 billion crude repayment loan the Nigerian National Petroleum Corporation (NNPC) Limited announced it sealed with the African Export-Import (Afrexim) Bank was designed to equip the federal government with the necessary dollar liquidity to stabilise the Naira.
According to the Otegra Ogra, SSA to President Tinubu, the loan will assist NNPC Ltd. in settling taxes and royalties in advance.
“A strengthened naira as a result of this initiative will lead to a reduction in fuel costs. This means that if the naira appreciates in value, the cost of fuel will drop and further increases will be halted.
However, the loan has reportedly stalled as other lenders that were supposed to be a part of the syndicated transaction are said to have backed out.
“Afrexim was supposed to put down only $250 million which was to help bring on board other lenders as they are already heavily exposed to Nigeria and have obligor limits.
Daily Trust findings show that the Central Bank of Nigeria (CBN) gross reserves have not seen accretion to suggest the $3bn has been received. The FX reserve has been down 0.2% to $33.68 billion since the announcement was made on August 16.
Intrigue behind closed doors
Daily Trust investigation revealed that the move to make the payment of N169.4 billion has the blessings of the high level of government, a senior government official disclosed to our reporter.
“If that payment was not approved, the country would have been thrown into serious crises because it was clear that the public could not bear in further depreciation in pump price, so something had to give.”
Daily Trust investigation also revealed that a subtle deal had to be struck with oil marketers to keep the current price.
“Everything has been done to not offset the market balance until we are able to resolve the production with Dangote refinery as well as the loans, once this is settled, we should see some stability,’ the source said.
Experts react
National President, Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), Benneth Korie, who had decried the prevailing development in the sector said, “Definitely the price of PMS will go up as much as the dollar price goes up. If you are exchanging $1 for N950, it will go up.”
Another expert, Dr Wisdom O. Mogbolu, said “I have said this repeatedly: we can’t think of removing subsidy without a functional refinery, without the stability of FX. For example, if the price of crude goes up, our petrol price must go up, now coupled with our volatile Fx, we must fix our system not kill the masses.”
The Chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Ejigbo Satellite Depot, Mr Akin Akinrinade, said stabilising the naira in the short term would be important to achieve the promise of the FG.
“There are two things that the government can do. The immediate one is the stability of the naira because as the price of dollars goes up, the price of petrol will go up. The government should intervene to ensure the stability of the Naira,” he said. https://dailytrust.com/subsidy-back-as-fg-pays-n169-4bn-in-august/ 4 Likes 2 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by TemplarLandry: 10:46am On Sep 21, 2023 |
Another fake news. 30 Likes 6 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by EmirofAfonjaz: 10:46am On Sep 21, 2023 |
BASTARDS....after all the noise...and propaganda
251 Likes 19 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Alchemy528: 10:47am On Sep 21, 2023 |
What are they now waiting for,, is tinubu waiting for his grave 🪦 yard or what
Contact me for your academic assignment thesis,power point presentation, proposal, article, available for any field of writing using Turnitin provide quality works just WhatsApp me below 34 Likes 6 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by iwaeda: 10:49am On Sep 21, 2023 |
ogododo: Despite the numerous assurances by President Bola Ahmed Tinubu that the subsidy is gone, Daily Trust’s finding shows that the federal government paid N169.4 billion as subsidy in August to keep the pump price at N620 per litre.
There have been several reports suggesting that the current price stagnation despite the worsening exchange rate and international crude price crossing $95 a barrel suggests a return of subsidy.
A document by the Federal Account Allocation Committee (FAAC), sighted by our reporter yesterday, showed that in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited. NNPC Limited used $220m (N169.4 billion at N770/$) out of the $275m to pay for the PMS subsidy. Then NNPC held back $55m, illegally.
The revelation by FAAC effectively indicates that the subsidy is back and NNPC is now taking NLNG dividends to pay the subsidy.
Former President Buhari left the country with the highest amount spent on subsidising petrol in Nigeria’s history.
According to oil and gas industry reports conducted by the Nigeria Extractive Industries Transparency Initiative (NEITI), the cost of petrol subsidy from 2015 to 2020 was N1.99 trillion.
Also reports by the Nigerian National Petroleum Corporation (NNPC) to the Federation Accounts Allocation Committee (FAAC), showed that petrol subsidy cost N1.57 trillion in 2021 alone and another N1.27 trillion from January to May 2022.
The government thereafter budgeted of N3 trillion to cover petrol subsidy costs from June 2022 to June 2023.
An aggregation of the entire costs showed that under President Buhari the government spent N7.83 trillion on petrol subsidies.
Global oil market dynamics
Brent crude crossed the $95 per barrel threshold as the value of the naira versus the US dollar hit a record low at the black market creating greater doubt about Nigeria’s elimination of petrol subsidies.
At the time this post was being written, U.S. West Texas Intermediate crude futures increased by more than 1% to $92.46 a barrel, while the international oil benchmark Brent crude futures crossed the $95 per barrel barrier.
The most recent increase in crude oil prices was expected to drive up the price of gasoline, but the FG’s decision to keep the energy product at N617/litre proved that the subsidy on Premium Motor Spirit had been quietly restored.
In addition to the rapid depreciation of the naira in Nigeria’s most accessible (black) FX market, the price cap on gasoline has made it difficult for marketers.
As of the last week of August, PMS was trading for $1,030.11 per metric tonne at the international market compared with the $859.25 it traded around July when NNPC increased the pump price to an average of N617 per litre. This shows an increase of 19.88 per cent.
The exchange rate in July was N820/$ but now N920/$, indicating a 12.19 per cent increase. The crude oil price in July was $78.50 per barrel, it traded for $88.50 per barrel in the last week of August. Yesterday, it hit the $95 mark.
Also, while the price per litre at the international market in July was $0.641, it stood at $0.792 in the last week of August. This means that the landing cost of PMS stands at about N728.64 per litre compared to the N529 it was in July.
The addition of freight costs, lightering costs (STS), distribution margin, ancillary costs by the Nigerian Midstream Downstream Regulatory Authority (NMDPRA), Nigerian Port Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) as well as marketers’ margin stands at about N90 to N105.
MOMAN, which had regularly provided a pricing update, had suspended it. A source at the organisation said there is an instruction not to share the update because the government has said there would be no price increase.
How FG planned to sustain N620 per litre
The $3 billion crude repayment loan the Nigerian National Petroleum Corporation (NNPC) Limited announced it sealed with the African Export-Import (Afrexim) Bank was designed to equip the federal government with the necessary dollar liquidity to stabilise the Naira.
According to the Otegra Ogra, SSA to President Tinubu, the loan will assist NNPC Ltd. in settling taxes and royalties in advance.
“A strengthened naira as a result of this initiative will lead to a reduction in fuel costs. This means that if the naira appreciates in value, the cost of fuel will drop and further increases will be halted.
However, the loan has reportedly stalled as other lenders that were supposed to be a part of the syndicated transaction are said to have backed out.
“Afrexim was supposed to put down only $250 million which was to help bring on board other lenders as they are already heavily exposed to Nigeria and have obligor limits.
Daily Trust findings show that the Central Bank of Nigeria (CBN) gross reserves have not seen accretion to suggest the $3bn has been received. The FX reserve has been down 0.2% to $33.68 billion since the announcement was made on August 16.
Intrigue behind closed doors
Daily Trust investigation revealed that the move to make the payment of N169.4 billion has the blessings of the high level of government, a senior government official disclosed to our reporter.
“If that payment was not approved, the country would have been thrown into serious crises because it was clear that the public could not bear in further depreciation in pump price, so something had to give.”
Daily Trust investigation also revealed that a subtle deal had to be struck with oil marketers to keep the current price.
“Everything has been done to not offset the market balance until we are able to resolve the production with Dangote refinery as well as the loans, once this is settled, we should see some stability,’ the source said.
Experts react
National President, Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), Benneth Korie, who had decried the prevailing development in the sector said, “Definitely the price of PMS will go up as much as the dollar price goes up. If you are exchanging $1 for N950, it will go up.”
Another expert, Dr Wisdom O. Mogbolu, said “I have said this repeatedly: we can’t think of removing subsidy without a functional refinery, without the stability of FX. For example, if the price of crude goes up, our petrol price must go up, now coupled with our volatile Fx, we must fix our system not kill the masses.”
The Chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Ejigbo Satellite Depot, Mr Akin Akinrinade, said stabilising the naira in the short term would be important to achieve the promise of the FG.
“There are two things that the government can do. The immediate one is the stability of the naira because as the price of dollars goes up, the price of petrol will go up. The government should intervene to ensure the stability of the Naira,” he said.
https://dailytrust.com/subsidy-back-as-fg-pays-n169-4bn-in-august/
Subsidy is gone. The deluded praise singers believed their daddy oyoyo, with NO critical thinking. Egbon duro collect your change. 128 Likes 12 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by iwaeda: 10:49am On Sep 21, 2023 |
8 Likes 1 Share |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by ogododo: 10:51am On Sep 21, 2023 |
nawa oo. Dis gofarment lie pass de devil. 73 Likes 5 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by ogododo: 10:51am On Sep 21, 2023 |
23 Likes 2 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by iwaeda: 10:52am On Sep 21, 2023 |
3 Likes 1 Share |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Varunpulyani: 10:53am On Sep 21, 2023 |
Awwww the cocaine sniffing vagabond is no more taking baby steps.
Where are all those head slamming 11 razor blade face?
Bastards 155 Likes 11 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Dreal1247: 10:54am On Sep 21, 2023 |
One chance Government. Why not assist local refineries? Why not encourage modular refineries? 79 Likes 3 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Jessyjeff: 10:54am On Sep 21, 2023 |
They can't hide the truth any longer. I pity those who believe this government is saving any money from fuel subsidy.
The huge monthly allocation they share is due to Naira devaluation.
The only hope for this country now is 100% local crude oil refining capacity, otherwise Naira will be worse off next year. 107 Likes 11 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Tetrahedron: 10:54am On Sep 21, 2023 |
He will hit the ground running indeed ! Balabluu is another buhari in voodoo hat!! 139 Likes 10 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Varunpulyani: 10:56am On Sep 21, 2023 |
TemplarLandry: Another fake news. Dedicate Bastard by shank On ya mandate screamers, UAE visa ban in the mud. 500000 quatazillion audio India investors in the mud. Subsidy is gone baba suwe in the mud Duro4chang discoverId helinues yarimo it's time to Ronu 125 Likes 12 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Donaldoni: 10:56am On Sep 21, 2023 |
I doubt this news
NNPC does crude for PMS swap and it earns its own dollars.
So where does the subsidy come in?
Anyways, the refineries would soon be up and running. No cause for alarm. 7 Likes 1 Share |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Varunpulyani: 10:58am On Sep 21, 2023 |
EmirofAfonjaz: BASTARDS....after all the noise...and propaganda
Very stupid black fools . Ask them which airport is Nigeria air currently 104 Likes 11 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by BIZNess123(m): 10:58am On Sep 21, 2023 |
Tinubu is a leader who listens to the cry of Nigerians... But wait oo imagine spending 3 trillion naira for subsidy.. that's huge.. 3 Likes |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Zxcvbnmghtr: 10:59am On Sep 21, 2023 |
Varunpulyani:
Dedicate Bastard by shank
On ya mandate screamers, UAE visa ban in the mud.
500000 quatazillion audio India investors in the mud.
Subsidy is gone baba suwe in the mud
Duro4chang discoverId helinues yarimo it's time to Ronu When is the supreme Court going to give their own verdict?! 3 Likes 1 Share |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Varunpulyani: 10:59am On Sep 21, 2023 |
Donaldoni: I doubt this news
NNPC does crude for PMS swap and it earns its own dollars.
So where does the subsidy come in? Why won't you doubt it Maizeeeiechukwu with a dirty cap and tribal mark 41 Likes 1 Share |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by happney65: 10:59am On Sep 21, 2023 |
When we told them it cannot work,they were getting angry and tearing their bras on us. Now they don return am again
As it is nonesense in 2012,so is the same in 2023. The government cannot be pushing their ineptitude to the people.
But No,very enlightened and educated people will be supporting nonesense.
Shey una don see it's all a ruse now
Nonesense and Tinubu 68 Likes 3 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by ogododo: 11:09am On Sep 21, 2023 |
happney65: When we told them it cannot work,they were getting tired and tearing their bras on us. Now they don return am again
As it is nonesense in 2012,so is the same in 2023. The government cannot be pushing their ineptitude to the people.
But No,very enlightened and educated people will be supporting nonesense.
Shey una don see it's all a ruse now
Nonesense and Tinubu Tinubu no sabi, no plan, nothing. 35 Likes 2 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Seefinish: 11:15am On Sep 21, 2023 |
Why is so easy to pay subsidy and so hard to build new refineries? This useless and evil party promised to build new refineries but unfortunately nothing to show forth except bogus amount of money claimed to have used for subsidy. 26 Likes 1 Share |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by franchasofficia: 11:16am On Sep 21, 2023 |
1 Like |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by wedgemont86: 11:28am On Sep 21, 2023 |
Does this mean the price of fuel will go bk to normal? 12 Likes |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Godstiger(m): 11:29am On Sep 21, 2023 |
Shit just got real 4 Likes |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Judolisco(m): 11:29am On Sep 21, 2023 |
Which kind yeye subsidy bdat 1 Like |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by grandstar(m): 11:29am On Sep 21, 2023 |
The CBN needs to fight inflation. It must become very hawkish.
Increasing interest rates to 25% or more to kill inflation may lead to a recession but high inflation makes everyone feel poorer and not just the poor.
Also, a strong currency would also reduce the price of petrol since the price is international fixed. A weak currency is the primary cause for the re-introduction of the subsidy. However, the increase in crude oil prices globally must have played a role.
Let's stop deceiving ourselves. As long as government keeps fixing the price of petrol, a subsidy remains. What is needed is a full deregulation of the price as done with diesel and kerosene.
Wait! Nigerian-Canadian author reveals in all powerful video the gist on how to japa to Canada. Whatsapp me for your own copy 4 Likes 1 Share |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by tishbite42: 11:29am On Sep 21, 2023 |
fulanis and yorubas are what JESUS described in John 10:10 33 Likes 1 Share |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Obaofaba: 11:30am On Sep 21, 2023 |
Fat lie 91 Likes 2 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Funkyswagzz(m): 11:30am On Sep 21, 2023 |
When we tell these agbado miscreants that fuel subsidy removal was a scam they will curse the hell out of u. What i love about them is how they ignore the way tinubu used them and dumped there ass with useless palliative. To them obi is the reason Nigeria is not working. Bunch of deluded nonentities who don't know there left from there right. Una never see shege😂😂😂🏃🏃🏃🏃 42 Likes 1 Share |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by Varunpulyani: 11:30am On Sep 21, 2023 |
19 Likes 2 Shares |
Re: 'Subsidy Back As FG Pays ₦169.4 Billion In August' - Daily Trust by NzogbuNzogbu: 11:30am On Sep 21, 2023 |
This tinubu and fraud sef,
Give him time they keep saying but he don loot Taya, same way buhari was stealing and they were giving him time
To ring bell in USA now is the biggest achievement so far 23 Likes 2 Shares |