Economy
Barclays Raises Brent Crude Price Forecasts by $11
By Adedapo Adesanya
British financial institution, Barclays, on Monday raised its Brent crude price forecasts by $11 to $111 per barrel for 2022, citing a larger and sustained disruption in Russian supply following sanctions by the European Union (EU).
It also increased the price benchmark for the year 2023 by $23 per barrel as it sees Brent prices averaging $111 this year and next, while it sees US West Texas Intermediate (WTI) at $108 for the same period.
Russian oil output is expected to decline by 1.5 million barrels per day by the end of the year, Barclays said, adding it no longer expects inventories to normalise over the forecast period.
“Limited spare capacity and constrained U.S. supply growth, mean inventories are likely to remain tight over our forecast horizon, barring a significant slowdown in demand due to spillover effects,” the bank said in a note.
Business Post had reported that the leaders of the EU last week agreed to cut oil imports from Russia by 90 per cent by the end of the year.
The sanctions will also bar operators within the EU from financing or insuring transportation of Russian oil to third-party countries.
“This will make it particularly difficult for Russia to continue exporting its crude oil and petroleum products to the rest of the world since EU operators are important providers of such services,” the European Council said in a statement.
European Council President Ursula von der Leyen proposed the ban in May after the US, which is less reliant on Russian oil, had announced a similar embargo.
Europe is the destination for nearly half of Russia’s crude and petroleum product exports before Russia’s invasion of Ukraine, according to the International Energy Agency (IEA).
Citi Research on Monday also raised its quarterly oil price forecasts for this year and its year-average outlook for 2023, noting any additional supply from Iran looked heavily delayed.
Citing tighter market balances, Citi raised its second-quarter 2022 Brent price forecast by $14 to $113 per barrel, and the third and fourth quarter prices by $12, to $99 and $85, respectively.
The bank estimates Brent to average $75 per barrel in 2023, revised higher by $16.
By Modupe Gbadeyanka
The Dangote Refinery located in the Lekki area of Lagos State has been described as a game-changer for Nigeria’s economy because of its significance to the country’s sustainable growth.
This was the view of the Ogun State Chamber of Commerce, Industry, Mines, and Agriculture (OGUNCCIMA) through its president, Mr Niyi Oshiyemi.
“The Dangote Refinery is a game-changer for Nigeria’s economy. With a capacity to refine 650,000 barrels of crude oil daily, it has reduced Nigeria’s reliance on imported petroleum products, conserved foreign exchange, and fortified our energy security.
“This milestone reinforces the critical role the private sector plays in national development,” Mr Oshinyemi said, noting that, “The refinery’s operations have created employment for Nigerians at all levels while fostering technology transfer and skills acquisition. This has strengthened local businesses and equipped them with the tools to compete in domestic and global markets.”
The emphasis on local content has been a cornerstone of Dangote Refinery’s strategy. By sourcing materials locally and partnering with indigenous companies, the refinery has supported the growth of Nigerian enterprises and encouraged investments in infrastructure, engineering, and technology.
The ripple effects of the Dangote Refinery extend beyond the energy sector. Its presence has catalyzed industrialization by attracting investments in related sectors such as petrochemicals, manufacturing, and transportation. This multiplier effect has significantly expanded Nigeria’s industrial base and enhanced the nation’s economic competitiveness.
“This refinery is a shining example of what can be achieved through visionary leadership and investment in strategic sectors. It demonstrates Africa’s potential to compete globally and foster regional integration,” Mr Oshiyemi remarked.
In addition to its economic contributions, Dangote Refinery has maintained a strong commitment to corporate social responsibility. The Dangote Group’s investments in education, healthcare, and infrastructure have improved the quality of life for many Nigerians and strengthened community resilience.
“Dangote Refinery exemplifies the role of private sector enterprises in driving social progress alongside economic development. Its initiatives in healthcare and education are building a brighter future for Nigerians,” the OGUNCCIMA chief noted.
He urged stakeholders across public and private sectors to emulate the Dangote Refinery’s innovative approach to development. By fostering partnerships and investing in transformative projects, Nigeria can achieve sustainable economic growth and reduce its reliance on external resources.
“This refinery stands as a model for what is possible when the private sector leads with vision and commitment. We call on all stakeholders to collaborate and replicate such success stories to build a resilient, self-reliant, and prosperous Nigeria,” Mr Oshiyemi concluded.
By Adedapo Adesanya
The House of Representatives on Wednesday passed the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the next three years (2025-2027).
In passing the MTEF, the lower chamber’s committees on Finance, Petroleum Upstream, and Petroleum Downstream were tasked to investigate reports from the Revenue Mobilization, Allocation, and Fiscal Responsibility Commission (RMAFC) alleging that the Nigerian National Petroleum Company (NNPC) Limited’s withheld N8.48 trillion as claimed subsidies for petrol.
Additionally, the investigation will address the Nigeria Extractive Industries Transparency Initiative (NEITI) report that claimed the NNPC failed to remit $2 billion (N3.6 trillion) in taxes to the federal government.
The committees were further directed to verify the total cumulative amount of unremitted revenue (under-recovery) from the sale of Premium Motor Spirit (PMS) by the NNPC between 2020 and 2023.
Some of the recommendations in the MTEF as adopted by the house are; that the projected oil benchmark prices are $75, $76.2 and $75.3 per barrel in 2025, 2026 and 2027, respectively.
Three-year projections for domestic crude oil production are 2.06 million barrels per day, 2.10 million barrels per day and 2.35 million barrels per day for the subsequent years of 2025, 2026 and 2027.
The country’s economic growth rate forecast, measured by the gross domestic product (GDP) was put at 4.6 per cent, 4.4 per cent and 5.5 per cent for the years 2025, 2026 and 2027, respectively.
By Adedapo Adesanya
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has said the price of Premium Motor Spirit, also known as petrol, being sold by the old Port Harcourt Refinery, which resumed production on Tuesday, is N75 per litre higher than that sold by the Dangote Refinery.
This was revealed by the association’s Public Relations Officer, Mr Joseph Obele, during the official reopening ceremony of the refinery, which is now operating at a capacity of 60,000 barrels per day.
Business Post reports that the lifting price of Dangote’s petrol product is N990 per litre. However, the refinery announced a N20 discount on Sunday, which is only available to marketers buying a minimum of 2 million litres of the fuel.
Mr Obele, a former chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN) at the Port Harcourt Deport who initially applauded the federal government for revitalising the old refinery, expressed concern over the pricing disparity between petrol supplied by the Nigerian National Petroleum Company (NNPC) Limited and the Dangote Refinery.
According to him, while Dangote Refinery sells petrol to marketers at N970 per litre, NNPC’s price stands at N1,045, a difference of N75 per litre.
He said the N75 price differential is a steep margin for businesses, particularly for an industry where profitability hinges on competitive pricing.
However, Mr Obele described the refinery’s restoration as a significant step in reducing Nigeria’s dependence on imported petroleum products.
He revealed that the Group Chief Executive Officer of NNPC Limited, Mr Mele Kyari, has promised to address the issue and harmonise prices to mitigate the impact on marketers and consumers.
The reopening of the Port Harcourt Refinery I is expected to enhance local production capacity and reduce reliance on imports, a move welcomed by stakeholders across the sector.
However, concerns over pricing disparities underscore the need for continuous reforms to stabilise the downstream sector of the petroleum industry.
The reopening has also sparked anticipation for the rehabilitation of other state-owned refineries including the second refinery in Port Harcourt as well as the Warri and Kaduna structures.
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