Economy
Deregulation: IMPAN Cries Foul Play, Accuses FG of Monopoly
By Adedapo Adesanya
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has accused the federal government of engaging in monopolistic deregulation of the downstream sector.
The National Operations Controller of the association, Mr Mike Osatuyi, made the disclosure against the backdrop of government inability to allow market forces to determine the petroleum pump price in the country.
He stressed the need for the government to enforce total deregulation of the petroleum downstream sector, something the body claims has been reserved for only one or a few selected players.
Explaining the reason behind the accusation, he said that government through the Nigerian National Petroleum Corporation (NNPC) has been the sole importers of petrol and few markets operating crude for the refined white product under the name Direct Supply Direct Purchase (DSDP) which negates the principle of market deregulation of the sector.
According to him, government monopolising importation of petrol goes against the principle of equal participation and the creation of a level playing field in the business.
“There is need for government to allow other players into the market to import petrol by making forex available at CBN official rate as promised severally by the Honourable Minister of State for Petroleum, Mr Timipre Sylva.
“The federal government should make forex available to oil marketers for import so as to drive down petrol price now that crude price is at $52 for Brent and $49.5 for WTI per barrel,” he said.
“Although the federal government has announced plans to make foreign exchange available to petroleum product marketers but we are waiting to be called upon to deliberate on the modalities involved.
“Government should make foreign exchange available to petroleum product marketers, like IPMAN, MOMAN and DAPPMAN, in order to make the importation of petrol into the country competitive, reduce the rising cost of the product and stop the overdependence on the NNPC for its importation and pricing,” he said.
Mr Osatuyi, who also doubles as the National Deputy President, (South) Indigenous Gas Traders Association of Nigeria (INGASAN) said availability of forex to oil marketers would stop the current monopoly in the importation of petrol by NNPC who has been the major importer of petrol over the years with other players in the downstream oil business buying the product from them.
The controller explained that this had not been the case since the government announced full deregulation of PMS (petrol) in march 2020, adding that there are still cases of price band control up to August 2020.
“From September, the price band control was withdrawn with the hope that full deregulation will surface but what we have been experiencing now is monopolistic deregulation.
“NNPC is the only player allowed to access forex for importation of petrol in addition to the crude for petrol handed down to few players in the industry.
“Government and NNPC are the only parties that can explain the type of deregulation we are practising in Nigeria.
“Government should allow all players to participate in the deregulation processes so that we can bring private-sector efficiency to the system which will bring down the price,” Mr Osatuyi added.
Further, Mr Osatuyi commended the President Buhari administration on the gas policy launched in January 2020 and particularly the launching of autogas programme for the country.
“Apart from reducing or total stoppage of gas importation into the country, the seriousness of the Federal Government on gas expansion programme will create jobs through the production and supply chain mechanism.
“Gas will be cheaper for Nigerians. It will serve as alternative means of powering of our vehicles through the usage of compressed natural gas (CNG).
“Liquefied Petrol Gas (LPG) will also serve as power for our generator which will make power cost be cheaper if crude oil goes up to $80 per barrel,” he added.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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