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Brent steadied at a 5-month high of $89.40pb

Brent traded today at $89.40pb, the highest since October 27, 2023. The oil price rally was triggered by OPEC+’s decision to maintain supply cuts of 2.2 million barrels per day in the first half of 2024. The decision came after the ministers of OPEC+ met on Wednesday, April 3, 2024, to review oil supply cuts and enforce compliance. The gains in oil prices were also fuelled by robust U.S. economic growth, with inflation rising to 3.2% in February and GDP expands by 3.4% in Q4’23, indicating strong summer demand. Higher oil prices and bumper domestic oil production are expected to bolster the Nigerian government’s fiscal revenue. This could potentially aid in meeting the obligations outlined in the 2024 budget.

NERC hiked electricity tariff by 240.91% to N225/KWh

The Nigerian Electricity Regulatory Commission (NERC) raised tariffs by 240.91% to N225.KWh from N66/KWh for customers with over 20 hours of daily power supply. This action is expected to reduce reliance on expensive alternatives like generators, cut production costs and potentially lower commodity prices, only if there is stable power supply. Consequently, consumers will pay a higher electricity bill which will reduce disposable income and increase production cost of firms. Dangote refinery’s diesel supply at N1,225/litre could ease transportation and logistics costs,  mitigating inflationary pressures. Overall, tariff hikes and improved diesel supply are anticipated to positively impact commodity prices by reducing production costs and transportation expenses, though short-term risks persist.

FDC’s M.D., Mr. Bismarck Rewane, discussed these and other burning economic issues on Channels TV Business Morning programme.

Click the link below to watch the video.