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Euro zone witness lowest inflation drop since 2009

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BRUSSELS – Euro zone inflation hit its lowest level since November 2009 in March; a shock drop that raises expectations the European Central Bank will take radical action to stop the threat of deflation in the currency bloc.

Annual consumer inflation in the 18 countries sharing the euro was 0.5 percent in March, with the pace of price rises cooling from February’s 0.7 percent reading, the EU’s statistics office Eurostat said on Monday.

Economists polled by Reuters had predicted a 0.6 percent reading – itself worrying for an economy that is barely pulling out of a record-long recession after a crisis that nearly broke up the currency area.

The euro zone is far from the deflation that Japan suffered from the early 1990s, when falling prices weakened demand, leading to wage cuts and even lower prices, but the bloc’s low inflation rate is a clear sign of economic fragility.

Inflation has now been in the ECB’s “danger zone” of below 1 percent for six consecutive months, and the flash reading increases the chances the ECB will cut interest rates when its Governing Council meets on Thursday. Speculation has also grown that it may employ other easing measures such as a negative deposit rate or even U.S.-style bond-buying.

But this year’s late Easter, which has delayed the impact of rising travel and hotel prices at a time when many people go away in Europe, could encourage the euro zone’s central bank to wait until its June meeting to act.

“This will keep the possibility of further monetary policy easing very much alive,” said Nick Kounis, head of economic research at ABN AMRO in Amsterdam. “Nevertheless, the central bank has shown quite some tolerance for low inflation recently.”

The ECB, which targets inflation of just below 2 percent, left borrowing costs unchanged at 0.25 percent in March and has argued that deflation risks in the bloc are limited.

‘LOW-FLATION’

Some euro zone members, like Ireland, Cyprus and Greece have experienced falling prices in recent months. For the bloc as a whole, price rises for industrial goods outside the energy sector were very modest in March, a sign demand remains weak.

On Monday, the International Monetary Fund’s top European official said the ECB had more room to cut interest rates to counter risks from low inflation, although he said the Fund did not see deflation setting in.

“We are not so much worried about deflation by itself, but we are very worried about what we call ‘low-flation’,” said Reza Moghadam, Director of the IMF’s European Department.

“There is more room for further (ECB) easing, not least because inflation is under control.”

ECB President Mario Draghi suggested after the ECB’s March meeting that the bank will either do nothing or take bold action should the outlook deteriorate.

He has also said the bank has been preparing additional policy steps to guard against possible deflation, and that the longer inflation remained low, the higher was the probability of deflationary risks emerging.

The relentless weakening trend may focus minds, especially after the head of Germany’s powerful central bank came out to discuss some of the bolder options in more detail, for example pumping more money into the economy via a bond-buying programme.

“There’s still a case for easing, but we don’t think there’s going to be enough agreement within the Governing Council members to ease on Thursday,” said Guillaume Menuet, an economist at Citigroup in London.

One factor that may temper the ECB’s response is a sense among economists that inflation has hit bottom and will rise in the coming months. Commerzbank’s Christoph Weil said he expected consumer prices to be back at 0.9 percent in April, noting the late Easter and also stabilizing food and energy prices.

– REUTERS

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Tesla Aims for 2028 Commercial Production of Flying Car

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Tesla has set a 2028 commercial production date for its new Roadster sports car that can briefly rise into the air using rocket technology.

According to CNN, the date was revealed when the manufacturers demonstrated its functionality on Thursday at a SpaceX testing facility in Texas, United States, where the two-seater vehicle performed a series of manoeuvres, including driving upside down before making a short airborne movement.

The prototype was operated without a driver during the test, with Musk saying the decision was taken “to make sure we don’t kill anyone.”

“Success is not guaranteed. I mean that. It’ll probably work, but if it doesn’t work, we’re at a safe distance,” he said.

READ ALSO: 2027 Election: ‘Your Future Is More Valuable’ — IGP Warn Youths Against Political Violence

CNN reported that the vehicle uses 10 nozzles and high-pressure air tanks to generate thrust, with Musk claiming it could accelerate from zero to 60 miles per hour in less than a second.

The Tesla boss attributed the development to cooperation between the electric vehicle manufacturer and SpaceX, the rocket company he also leads.

He described the project as “the results of what happens when you have a collaboration with the world’s best car company and the world’s best rocket company.”

Musk also sought to assure spectators that the demonstration was genuine, saying, “We need an audience to prove that it’s not AI or SI. So you guys can tell people you saw it with your eyes, because what you see with your eyes, you will not believe.”

Despite the display, questions remain about whether the vehicle can achieve sustained flight and how practical it would be for everyday transportation.

Roger Conner, curator for vertical flight at the Smithsonian’s National Air and Space Museum, told CNN that combining the requirements of road vehicles and aircraft presented significant engineering challenges.

“Aircraft are extremely sensitive to weight, whereas with ground vehicles you want them to have bumpers and crumple zones and all that,” he said.

“Inevitably, something that is a hybrid between the two is going to be a poor performing aircraft and a poor performing vehicle, and also quite expensive,” he added.

Conner questioned whether the demonstration amounted to flying in the conventional sense.

“We’re not talking about sustained flight. We are literally talking about hopping,” he said.

However, Jim Dukhovny, chief executive of flying car startup Alef, said the technology was achievable, while pointing to the difficulties involved in making such vehicles transition safely from vertical take-off to forward flight.

“It absolutely is 100% feasible,” he told CNN.

“That being said, the hardest part on all eVTOLs, and for us, it’s a transition from (rising) vertical to (moving) forward. It needs to be extremely careful, making sure you do not lose lift, and making sure it’s very stable,” he added.

CNN also reported that Alef’s prototype weighs about 254 pounds, uses eight propellers and is designed to carry one person.

Musk said Tesla intended to begin production of the new Roadster in 2028.

CNN reported that the latest display adds to Musk’s ambitions to push Tesla’s vehicle technology beyond conventional electric cars, although the prototype’s ability to operate as a practical flying vehicle has yet to be established.

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Marketers Eye Portion of FG’s Petrol Discount

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The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has urged the Federal Government to add its member-stations to the petrol discount programme.

It cautioned that the current arrangement could limit the reach and deny vast consumers in underserved communities the benefits of the 30-day discount window.

The PETROAN also urged the FG to allocate at least 30 percent of the discounted petrol volume to outlets operated by its members.

READ ALSO: Tanzania Nears Completion of $42bn Equinor, Shell-Led LNG Project

The calls followed last week’s announcement by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, of a petrol discount at Nigerian National Petroleum Company Limited (NNPC Ltd) retail outlets, with priority given to public transport operators nationwide.

According to the National Publicity Secretary, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, the exclusion of independent marketers could undermine the programme’s effectiveness, particularly in communities where NNPC retail outlets have limited presence.

He argued that independent marketers, with their extensive nationwide distribution networks, were better positioned to extend the benefits of the intervention to consumers in remote and underserved areas.

“Independent oil marketers have over 90 percent coverage and presence in the nooks and crannies of this country. You are giving NNPC that is situated only in the town. So how do the poor masses, whom you intend to ensure that this petroleum product will alleviate their sufferings, how would they now get it?” Ukadike asked.

He said the association was not opposed to the government’s policy but insisted that independent marketers should be included to ensure wider access to the discounted product.

“But it’s government policies; we are not against government policies, but let it be all-inclusive; let independent marketers be part of it,” he said.

Ukadike also urged the government to extend the discount period to 60 days, citing logistical challenges that could delay the movement of petrol from coastal depots to other parts of the country.

“And the 30 days should be extended to 60 days. Because of the circulation of petroleum products, most times it takes two weeks for a truck to leave Apapa and get to Gombe, Maiduguri, because of the bad road and all the rest of them and loading process,” he added.

Similarly, PETROAN National President, Billy Gillis-Harry, urged the Federal Government to allocate 30 per cent of the discounted petrol volume to the association’s retail outlets to facilitate broader national distribution.

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Tanzania Nears Completion of $42bn Equinor, Shell-Led LNG Project

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In the bid to transform Tanzania into the East African regional energy hub, the country is on the verge of concluding an agreement with a consortium of energy companies, including a $42 billion LNG project.

It was gathered that the project is designed to tap the 47.13 tcf of gas discovered in Tanzania’s deep offshore fields, part of the country’s estimated 57.54 tcf in total discovered reserves, the sixth-largest in Africa, behind Nigeria, Algeria, Senegal, Mozambique and Egypt.

READ ALSO: Shell Identifies Keys to Nigeria’s Energy Future

Equinor and Shell would be the lead operators, alongside involvement from ExxonMobil Pavilion Energy and Medco Energi, while state oil major, the Tanzania Petroleum Development Corporation (TPDC), would also hold an equity stake in the project.

“It’s almost there,” Khamis Mussa Omar, Tanzania’s finance minister, told Reuters.

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