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‘Desperate Choices’ This Winter As Three More UK Energy Suppliers Toppled By Price Surge

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‘Desperate choices’ this winter as three more UK energy suppliers toppled by price surge

Households are facing “desperate choices” this winter, with energy bills rising by £30 a month for those who have had to switch supplier owing to a wave of energy company failures, as three more collapsed on Wednesday.

Rising gas prices have driven 12 energy companies under this year, forcing the regulator, Ofgem, to transfer 2m customer accounts to surviving suppliers. The collapse of a further three will force the regulator to move 233,000 more customer accounts, with bills expected to increase as a result.

Ofgem said Igloo Energy, Symbio Energy and Enstroga had become the latest companies to succumb to a gathering crisis that shows no sign of abating, with gas prices remaining stubbornly high amid international shortages as winter approaches.

The regulator emphasised that customers would not have any disruption to the supply of energy to their homes, adding that anyone with credit in their accounts with those companies would not lose their money.

But it will have to find a new provider for nearly a quarter of a million people through its “supplier of last resort” scheme, under which financially healthy companies take on customers from collapsed rivals.

Those that were on cheaper fixed-rate tariffs, often used by smaller, start-up energy companies to woo new customers, will see their bills increase to the government’s energy cap, which is £1,277 for a household with average usage.

A report by Citizens Advice has found that consumers who are moved to a new supplier typically pay £30 a month more than before. Advisers at the charity fear many will face fuel poverty this winter and could end up turning off their fridges and freezers, relying on hot-water bottles for warmth and requesting support to buy extra duvets and blankets.

Clare Moriarty, chief executive of Citizens Advice, said: “Overnight price hikes will be a shock for more than a million households whose energy companies have gone bust. We’re particularly worried about those who’ll face desperate choices this winter because of the cumulative impact of soaring bills, the planned cut to universal credit and inflation.

“The government and Ofgem must guarantee that the warm home discount will be continued for people moving to new energy suppliers. People on the lowest incomes should be able to access emergency winter grants so they can stay warm in the cold months ahead.”

Earlier this week, Shell Energy took on 255,000 customers from a collapsed smaller rival, Green, while Octopus Energy has taken on 580,000 customers stranded when Avro Energy failed.

Before the latest collapses, announced on Wednesday, the number of households supplied by an energy company that had gone bust this year totalled almost 2m, forcing Ofgem into an unprecedented scramble to keep to the customer transfer system going.

Neil Lawrence, the director of retail at Ofgem, said: “We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.

“I want to reassure customers of Enstroga, Igloo Energy and Symbio Energy that they do not need to worry. Under our safety net we’ll make sure your energy supplies continue. If you have credit on your Enstroga, Igloo Energy or Symbio Energy account, the funds you have paid in are protected and you will not lose the money that is owed to you.

“Ofgem will choose a new supplier for you, and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime.

“You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your tariff. Any customer worried about paying their energy bill should contact their supplier to access the range of support that is available.”

Igloo Energy is the largest of the companies that went under on Wednesday, with 179,000 customers, followed by Symbio with 48,000 and Enstroga with 6,000.

Igloo blamed high gas prices and the government’s energy price cap, which it said was a good idea but had been “designed to favour the largest suppliers”.

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Naira depreciates further to N614/$ at parallel market

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Naira depreciates further to N614/$ at parallel market

The Nigerian naira has dropped to N614 against the dollar at the parallel section of the foreign exchange market.

The figure signifies a depreciation of N7 or 1.2 percent compared to the N607 it traded last two weeks.

Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke to TheCable in Lagos on Tuesday, said they purchase the greenback at N608/$, make a gain of N6, and then sell at N614.

At the official market, the naira also depreciated by 0.21 percent to close at N421/$ on Monday, according to information obtained from FMDQ OTC Securities Exchange — a platform that oversees official foreign-exchange trading.

Nigeria operates multiple exchange rate windows ranging from the importers and exporters window (I&E) window, where forex is traded between exporters, investors, and purchasers of forex, the SMEIS window where forex is sold to importers, and others.

International organisations such as the World Bank and the International Monetary Fund (IMF) have constantly advised the Central Bank of Nigeria (CBN) to unify the official and parallel market exchange rates.

But Godwin Emefiele, the CBN governor, had said that despite advice offered by IMF and the World Bank, developing economies such as Nigeria had the liberty of adopting “homegrown solutions to their economic problems.

According to him, the managed floating exchange rate, which allows the CBN to intervene in the market when there is a supply shock, would be in place as long as supply exceeds demand.

“They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself,” he had said.

“When you allow that to happen, you will have an uncontrollable spiral on the naira.

“But what managed float means is that we have some measures in place to help control the spiral.”

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

These are challenging times for the federal and state governments as one major source of income to the federation account seems to be totally cut off.

On Monday, The National Petroleum Company Limited (NNPC) revealed it failed to remit monies to the federation account in May 2022 despite making N470.61 billion.

This is the fifth straight month NNPC has failed to credit the federal account while exporting crude at an average price of $100 per barrel.

Details of the June FAAC report obtained by The Harmattan News showed NNPC since the start of the year made N1.897 trillion, over N234.1 billion more than the expected revenue.

Sadly, however, NNPC said all the revenue had gone into various expenditure which includes petrol subsidy, oil search, Pipeline Security & Maintenance cost, National Domestic Gas Development and Nigeria Morocco Pipeline cost among others.

As expected, the bulk of the expenditure, N1.27 trillion, went toward recovery (also known as petrol subsidy).

In fact, NNPC said it has budgeted another N617 billion for petrol subsidy in June.

The report reads: “The Value Shortfall on the importation of PMS recovered from May 2022 proceeds is N327,065,907,048.06 while the outstanding balance carried forward is N617bn .”

“The estimated Value Shortfall of N845,152,863,012.97bn (consisting of arrears of N617bn plus estimated May 2022

Value Short Fall of N227,721,200,478.23) is to be recovered from June 2022 proceed due for sharing at the July 2022 FAAC Meeting,” it added.

The development means states have a tough road ahead and will have to look inwards to cover for the drop in federal allocations.

Already, some states have announced plans to slash workers’ salaries over dwindling income.

Kano Sate has already announced plans to slash workers’ salaries, following in the foot steps of the Ekiti State government that announced civil servants’ and political appointees’ salaries will be slashed in response to the present economic reality in the country.

Ekiti went further to suspend minimum wage implementation with no date of resumptions.

The Harmattan News had recently reported that pension contribution from governments dropped to a 16-year low in the first quarter of 2022.

From recent developments, it is more likely the figure will tank further.

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Nigerian govt to auction N225bn bond as search for funds continues

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Nigerian govt to auction N225bn bond as search for funds continues

Federal government bonds worth N225 billion would be auctioned today, Monday, June 20, 2022, by the Debt Management Office (DMO) at the primary market.

The debt instrument is being sold by the central government to raise funds to finance the 2022 budget deficit and in today’s exercise, the DMO is offering the notes in three tenors.

The debt office is anticipated to sell the FGN bonds at double digits to make the asset class more attractive to investors.

In a circular published on its website and obtained by The Harmattan News, all three maturities are re-opening, meaning they are from the previously sold bonds.

The circular noted that N75 billion worth of a 10-year bond with maturity in 2025 would be offered for sale at the auction. Another N75 billion worth of a 10-year note maturing in 2032 is up for grabs and N75 billion worth of a 20-year instrument with maturity in 2042 would be sold.

Intending subscribers would be expected to reach out to primary dealer market makers to buy the bonds for N1,000 per unit subject to a minimum subscription of N50 million and in multiples of N1,000 thereafter.

The interest would be paid by the government semi-annually, while the bullet repayment will be done on the maturity date.

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