Economy
NNPC Pushes For N150 Per Litre For Petrol
By Dipo Olowookere
There are strong indications that the Nigerian National Petroleum Corporation (NNPC) is planning to propose to the Federal Government a new pump price of N150 per litre price for Premium Motor Spirit (PMS) otherwise called petrol against the N145 per litre it presently sells.
This is as the embargo placed on price increase by President Muhammadu Buhari has worsened planned fuel price hike dilemma for the corporation.
According to the New Telegraph, landing cost of PMS as at last weekend has surged to N122.03 per litre, about N4 increase from the specification in the pricing template of the Petroleum Products Pricing Regulating Agency (PPPRA).
This, further checks showed, was responsible for the N4 per litre price hike by NNPC’s mega stations across the country, which hiked their pump price from N141 to N145 per litre.
Already, some independent marketers, caught in the debacle, who were selling at the N145 price before now, have adjusted their pumps to meet up with the market reality.
Further checks by the newspaper showed that seven foreign contractors, including Vitol, Petrocam and Northwest who participated actively in the importation of PMS, have abandoned the contracts.
“The NNPC top notch caught up in this dilemma have approached the president to explain the new market realities to him, but the president refused to hear any briefing on price hike,” a source at the presidency told the newspaper.
“The only option left on the table for NNPC is to push the prices at their stations to the highest point of the price mark.”
The source added that the Group Managing Director of NNPC, Dr Mainkanti Baru, would still meet with the president next week to brief him on the possibilities of declaring huge losses by the yearend due to the situation.
“Major marketers like ExxonMobil have exited the downstream while Total is on the verge of its exit. Marketers are running at loss; they are not making profits as envisaged and some of them have adjusted their pumps to accommodate price hike.
“In all these, the DPR is helpless because the N145 per litre price is still within the range,” an industry source added.
The Group General Manager, Crude Oil Marketing Department of the NNPC, Mr Mele Kyari, had earlier hinted that the nation’s difficult business environment may make it difficult to sustain the current pump price of petrol.
He spoke at the 10th Oil Trading and Logistics Africa Downstream Week in Lagos, where he also said it was impossible to import products at the current market price, at current fixed foreign exchange rate and recover one’s money.
Marketers that are currently selling below N145/ litre, he said, are doing so because they are not the importers of the fuel. “Because we (NNPC) have taken the heat, and you buy from us you can afford to go to the market and then put a ridiculous price,” he said.
However, Kyari ruled out the possibility of increasing the pump price by the government due to the economic hardship in the country, saying, “It is impossible for this government to announce tomorrow that petrol is about N150.”
“This government cannot sustain it,” he declared, maintaining that this “is the truth. The people will not take that number. But that is why the suppliers now are not importing. It is not about the foreign exchange.”
“We are in subsidy regime absolutely, there is no way you bring product today and take it and sell at N145 and get back your money, and make profit. That is not possible. You can see some marketers saying that fuel is N138.
“It is because they did not import. Somebody has taken the heat of the price.”
Few weeks before Kyari’s submission, former and present Group Managing Directors of the NNPC had also expressed fears that the current pump price of N145 per litre is no longer feasible.
They said the amount does not correspond with the price-determining components of the commodity and the fluctuations of the foreign exchange rate.
The NNPC had, in its statement, said: “They (the GMDs) noted that the petrol price of N145/litre is not congruent with the liberalisation policy, especially with the foreign exchange rate and other price determining components such as crude cost, Nigerian Ports Authority charges, etc. remaining uncapped.”
On the N145 per litre price, Kyari had said: “We have created a niche market for the forex. We have ring-fenced all forex from the upstream such that those forex will be available at a fixed price; a price that the CBN has agreed. I am part of the people who are involved in making sure that this forex is available.
“I am part of the committee allocating those forex, and I know and I can see some of you here; we gave you forex, but you returned it. And the reason that was given was that the forex was not enough to import.
“But the truth is that, that is not the truth. The truth is that if you go to the market today and buy products and land here, that you are required to sell it at N145 max. That is the main reason why people are not importing.
“It is not forex; we have addressed the forex issue.” The PPPRA has, however, left its template unchanged for seven months. “Based on 30 Days Moving Average Platts Posted Price for: 23rd April – 23rd May, 2016, the Landing Cost is 122.03 per litre; Total Margins are 18.37; while Total Cost 140.40; and Retail Price Band is between 135 and 145,” the agency said on its website yesterday.
“Meanwhile, the NNPC stations have increased the pump price of petrol at its retail outlets by N4 from N141 to N145 per litre. Though the new N145 price remains within the maximum price cap fixed by the Federal Government last May, this is the first time fuel at NNPC’s outlets will be sold at that price.
Hitherto, prices have been hovering between N141 and N143 per litre at NNPC and affiliate stations in major cities and even less at stations in the hinterlands.
The prices have been N141 in last few months until last week when it was raised to N145. Group General Manager, Group Public Affairs Division of NNPC, Alhaji Garba Deen Muhammad, however, said the N4 per litre price hike by NNPC was interplay of market forces. “Marketers can sell between N135 and N145 range price regime introduced in May.
“It is simply an interplay of market forces,” he said.
The N145 per price at NNPC, a management staff of the corporation said, was to minimise the losses the NNPC will record by the end of the year through its monopoly of importation. Already, the revenue losses recorded by the corporation had hit N35.4 billion in two months, as profits woes rocking the corporation worsened.
The monthly financial and operations report released on the corporation’s website last Thursday showed that the losses were recorded in July and August.
The NNPC stated that the force majeure declared by SPDC, as a result of vandalised 48-inch Forcados export line was a drag to NPDC, its subsidiary, and the overall group performance.
Additional information from https://newtelegraphonline.com/petrol-nnpc-pushes-n150-per-litre/
By Dipo Olowookere
Investors at the Nigerian Exchange (NGX) Limited have continued to show excitement for the full-year earnings of companies on the exchange so far.
On Friday, Customs Street further appreciated by 1.01 per cent as more organization released their financial statements for the 2025 fiscal year.
During the session, traders continued their selective trading strategy, with the energy sector going up by 2.47 per cent at the close of business despite profit-taking in the banking counter, which saw its index down by 0.11 per cent.
Yesterday, the insurance space grew by 2.16 per cent, the industrial goods segment expanded by 1.70 per cent, and the consumer goods industry jumped by 0.42 per cent.
Consequently, the All-Share Index (ASI) increased by 1,722.13 points to 171,727.49 points from 170,005.36 points, and the market capitalisation soared by N1.106 trillion to N110.235 trillion from the N109.129 trillion it ended on Thursday.
Business Post reports that there were 59 appreciating stocks and 19 depreciating stocks on Friday, representing a positive market breadth index and strong investor sentiment.
The trio of Omatek, Deap Capital, and NAHCO gained 10.00 per cent each to sell for N2.64, N6.82, and N136.40 apiece, as Zichis and Austin Laz appreciated by 9.98 per cent each to close at N6.72 and N5.40, respectively.
Conversely, The Initiates depreciated by 9.74 per cent to N19.45, DAAR Communications slumped by 7.32 per cent to N1.90, United Capital crashed by 6.55 per cent to N18.55, Coronation Insurance lost 5.71 per cent to quote at N3.30, and First Holdco shrank by 5.53 per cent to N47.00.
The activity chart showed an improvement in the activity level, with the trading volume, value, and number of deals up by 33.77 per cent, 93.27 per cent, and 10.63 per cent, respectively.
This was because traders transacted 953.8 million shares worth N43.1 billion in 51,005 deals compared with the 713.0 million shares valued at N22.3 billion traded in 46,104 deals a day earlier.
Fidelity Bank was the most active with 92.4 million units sold for N1.8 billion, Chams transacted 69.2 million units valued at N310.9 million, Deap Capital exchanged 59.1 million units worth N382.7 million, Access Holdings traded 57.2 million units valued at N1.3 billion, and Tantalizers transacted 48.6 million units worth N228.2 million.
By Adedapo Adesanya
The value of the Naira contracted against the United States Dollar on Friday by 13 Kobo or 0.01 per cent to N1,366.19/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) from the previous day’s value of N1,366.06/$1.
According to data from the Central Bank of Nigeria (CBN), the Nigerian currency also depreciated against the Pound Sterling in the same market window yesterday by N2.37 to N1,857.75/£1 from the N1,855.38/£1 it was traded on Thursday, and further depleted against the Euro by 57 Kobo to close at N1,612.52/€1 versus the preceding session’s N1,611.95/€1.
In the same vein, the exchange rate for international transactions on the GTBank Naira card showed that the Naira lost N8 on the greenback yesterday to N1,383/$1 from the previous day’s N1,375/$1 and at the black market, the Nigerian currency maintained stability against the Dollar at N1,450/$1.
FX analysts anticipate this trend to persist, primarily influenced by increasing external reserves, renewed inflows of foreign portfolio investments, and a reduction in speculative demand.
In the short term, stability in the FX market is expected to continue, supported by policy interventions and improving market confidence.
Nigeria’s foreign reserves experienced an upward trajectory, increasing by $632.38 million within the week to $46.91 billion from $46.27 billion in the previous week.
The Dollar appreciation this week appears to be largely technical, serving as a correction to the substantial losses experienced from mid- to late January.
Meanwhile, the cryptocurrency market slightly appreciated, with Bitcoin (BTC) climbing near $68,000, up nearly 5 per cent since hitting $60,000 late on Thursday after investor confidence in crypto’s utility as a store of value, inflation hedge, and digital currency faltered.
The sell-off extended beyond crypto, with silver plunging 15 per cent and gold sliding more than 2 per cent. US stocks also fell.
The latest recoup saw the price of BTC up by 4.7 per cent to $67,978.96, as Ethereum (ETH) appreciated by 6.3 per cent to $2,021.10, and Ripple (XRP) surged by 9.5 per cent to $1.42.
In addition, Solana (SOL) grew by 7.3 per cent to $85.22, Cardano (ADA) added 6.1 per cent to trade at $0.2683, Dogecoin (DOGE) expanded by 5.4 per cent to $0.0958, Litecoin (LTC) rose by 5.2 per cent to $53.50, and Binance Coin (BNB) jumped by 2.3 per cent to $637.79, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Adedapo Adesanya
Oil prices settled higher on Friday as traders worried that this week’s talks between the US and Iran had failed to reduce the risk of a military conflict between the two countries.
Brent crude futures traded at $68.05 a barrel after going up by 50 cents or 0.74 per cent, and the US West Texas Intermediate (WTI) crude futures finished at $63.55 a barrel due to the addition of 26 cents or 0.41 per cent.
Iran and the US held negotiations in Muscat, the capital of Oman, on Friday to overcome sharp differences over Iran’s nuclear programme.
It was reported that the talks had ended with Iran’s foreign minister saying negotiators will return to their capitals for consultations and the talks will continue.
Regardless, the meeting kept investors anxious about geopolitical risk, as Iran wanted to stick to nuclear issues while the US wanted to discuss Iran’s ballistic missiles and support for armed groups in the region.
Any escalation of tension between the two nations could disrupt oil flows, since about a fifth of the world’s total consumption passes through the Strait of Hormuz between Oman and Iran.
Saudi Arabia, the United Arab Emirates, Kuwait and Iraq export most of their crude via the strait, as does Iran, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC).
According to Reuters, Iran objected to the presence of any US Central Command (CENTCOM) or other regional military officials, saying that would jeopardise the process.
The current confrontation was sparked by more than two weeks of unrest in Iran that saw authorities launch a deadly crackdown that killed thousands of civilians and shocked the world. As reports of the deaths trickled out of Iran, US President Donald Trump threatened to strike Iran if any of the tens of thousands of protesters arrested were executed.
Meanwhile, Kazakhstan’s planned oil exports could fall by as much as 35 per cent this month via its main route through Russia, as the country’s top oil company, Tengiz oilfield, slowly recovers from fires at power facilities in January.
ING analysts have pointed out Iran’s neighbour, Iraq, and a disagreement with the US as another bullish factor for oil prices. It seems Iraqi politicians favour Mr Nouri al-Maliki as the country’s next Prime Minister, but the US thinks Mr al-Maliki is too close to Iran. President Trump has already threatened the oil producer with consequences if he emerges as PM.
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