Economy
FG May Increase Petrol Pump Price
By Ebitonye Akpodigha
Nigerians have been given a hint that they may, in the future, have to brace up for another round of hike in the price of Premium Motor Spirit (PMS) commonly called petrol.
This is because the present pump price of N145 per litre, according to the Nigerian National Petroleum Corporation (NNPC), was no long sustainable, saying that the present price was being subsidized by the government for Nigerians to be able to afford it.
The NNPC said the reason for this is the prevailing exchange rate in the country.
Group General Manager, Crude Oil Marketing Division at the NNPC, Mr Mele Kyari, speaking on Monday at the 2016 Oil Trading and Logistics (OTL) Conference in Lagos, noted that there was no way petrol would continue to be sold at the current pump price considering that and other factors.
He said despite the Central Bank of Nigeria (CBN) deciding to give oil importers a preferential exchange rate, marketers still find it difficult to make profit at N145 per litre, meaning if they continue with the current price regime, government would have to continue to pay for the losses.
“We have a very difficult business environment. It is impossible today to import products at the current market price, at the current foreign exchange rate. There is no way today you can take the product to retail and sell at N145. It is not possible today.
“If that is true and I believe that it is true because we all go to the market, why can’t we sell above N145? That is where legislation should come in.
“Today, are we in a subsidy regime, absolutely. There is no way you can bring products today and take it and sell at N145 and get back your money, and make a profit. That is not possible,” he said at the occasion.
However, Mr Kyari emphasised that the government would not announce another hike in the pump price because of the timing.
“I also know today that it is impossible for this government to announce tomorrow that petrol is about N150. This government cannot do it. That is the truth. The people will not take that number,” Mr Kyari noted.
He pointed out that at the moment, most oil marketers have stopped importing the products, noting that those who still sell below N145 per litre buy the product locally.
“You can see some marketers saying that fuel is N138. It is because they did not import it. But someone has taken the heat; indeed, we (NNPC) have taken the heat, and you buy from us, so you can afford to go to the market and then put a ridiculous price. It is possible, because they did not import it,” he said.
Meanwhile, the House of Representatives has promised to review the laws on licensing, regulation and incentives on petroleum refineries in the country.
This, it explained, when put in place, would lessen the bureaucracies and bottlenecks associated with the refining of petroleum products in the country.
Speaking also at the event, Speaker of the House, Mr Yakubu Dogara, who was represented by the Chairman of the House Committee on Petroleum (Downstream), Mr Joseph Akinlaja, noted that an amendment bill on the regulation and licensing of refineries had passed second reading in the lower chamber of the National Assembly.
By Dipo Olowookere
The hunt for dividend-paying stocks rebounded the Nigerian Exchange (NGX) Limited by 1.39 per cent on Monday after a spate of sell-offs last week.
According to data, energy equities were the toast of investors yesterday, with the sector closing higher by 4.68 per cent when the closing gong was struck at 2:30 pm on the stock exchange.
Further, the industrial goods space appreciated by 2.49 per cent, the consumer goods index improved by 0.36 per cent, and the banking segment appreciated by 0.26 per cent, while the insurance counter lost 1.49 per cent to profit-taking.
As a result, the All-Share Index (ASI) gained 2,687.46 points to finish at 195,514.23 points compared with the 192,826.77 points it ended last Friday, and the market capitalisation grew by N1.725 trillion to N125.488 trillion from N123.763 trillion.
NGX Group, which announced a final dividend of N2 and a bonus share of 1-for-3 last Friday, was the best-performing equity on Monday after it gained 10.00 per cent to trade at N136.40.
In addition, Aradel Holdings appreciated by 9.99 per cent to N1,192.30, Union Homes REIT grew by 9.96 per cent to N76.15, Sovereign Trust Insurance advanced by 9.95 per cent to N2.43, and PZ Cussons rose 9.72 per cent to N79.00.
On the flip side, Custodian Investment ended as the worst-performing equity with a 10.00 per cent loss to settle at N61.20, McNichols shed 9.92 per cent to N7.63, Africa Prudential depleted by 9.75 per cent to N16.20, Chams crashed by 9.11 per cent to N4.09, and Neimeth depreciated by 8.23 per cent to N10.60.
The most active stock for the session was Fortis Global Insurance with 109.1 million units sold for N109.2 million, Japaul traded 54.7 million units valued at N218.9 million, UBA transacted 43.0 million units worth N2.1 billion, Access Holdings exchanged 30.7 million units for N799.4 million, and Oando sold 28.5 million units worth N1.3 billion.
In all, market participants bought and sold 789.9 million shares valued at N35.1 billion in 84,259 deals yesterday compared with the 823.8 million shares worth N34.8 million traded in 63,759 deals in the preceding session, indicating a decline in the trading volume by 4.16 per cent, and growth in the trading value and number of deals by 0.86 per cent, and 32.15 per cent apiece.
By Adedapo Adesanya
The gradual fall of the Naira against the United States Dollar continued on Monday after it further lost N14.63 or 1.07 per cent to close at N1,378.02/$1 compared with the N1,363.39/$1 it was traded at last Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEX). This was due to an insufficient supply of FX to meet the demand of customers at the currency market.
The Nigerian currency also depreciated against the Pound Sterling in the same market segment during the session by N9.65 to trade at N1,846.14/£1 compared with the previous trading day’s rate of N1,836.49/£1, and declined against the Euro by N3.76 to settle at N1,612.98/€1 versus the preceding session’s N1,609.22/€1.
In the same vein, the Nigerian Naira tumbled against the greenback in the black market yesterday by N5 to quote at N1,375/$1, in contrast to the previous value of N1,370/$1, as forex demand pressure gradually mounts.
The Central Bank of Nigeria (CBN) sold $200 million to boost the supply side and moderate demand pressures. For February, the CBN operated on both sides of the market, selling $225 million and purchasing $261.80 million. However, as FX demand continued to outpace available supply, pressure mounted further in the market.
Meanwhile, the research subsidiary of Coronation Merchant Bank said FX liquidity improved significantly last week. Total FX inflows into the official window rose to $1.07 billion from $648.20 million in the prior week.
Analysts maintain that the exchange rate is still trading within its projected N1,350 to N1,450 per Dollar band, dismissing panic concerns.
Meanwhile, the cryptocurrency market was bullish on Monday after macro shocks triggered repositioning across markets, and digital currencies benefited as some investors rotated back into risk.
After weeks of US military buildup and deadlocked nuclear diplomacy, the war with Iran increases the danger of a wider regional confrontation in a strategically vital economic corridor, adding to the risk gains for the market.
Ethereum (ETH) gained 5.5 per cent to trade at $2,050.07, Solana (SOL) appreciated by 5.2 per cent to $87.76, Bitcoin (BTC) added 4.9 per cent to sell for $69,322.35, Binance Coin (BNB) rose 3.2 per cent to $637.94, and Litecoin (LTC) expanded by 3.0 per cent to $52.39.
Further, Ripple (XRP) jumped 2.9 per cent to $1.40, Cardano (ADA) improved by 2.1 per cent to $0.2801, and Dogecoin (DOGE) increased by 1.9 per cent to $0.0946, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Adedapo Adesanya
Oil prices surged 8 per cent on Monday as Israel and US strikes on Iran and retaliation by the Islamic Republic forced shutdowns of oil and gas facilities across the Middle East and disrupted shipping in the crucial Strait of Hormuz.
Brent crude rose 8.7 per cent or $6.36 to trade at $79.23 per barrel, while the US West Texas Intermediate (WTI) crude expanded by $7.8 per cent or 5.27 per cent to $72.29 per barrel.
Oil’s surge on the restart of trading after the weekend, however, was smaller than expected. On Sunday, some analysts had predicted oil would open above $90 a barrel and closer to $100.
The widening Iranian conflict is disrupting oil flows to several Asian countries as vessels are bottled up within the Middle East Gulf, and crude and transport costs are rising.
US President Donald Trump signalled the US-Israel military assault could continue for weeks, which could mean a prolonged disruption of traffic through the Strait of Hormuz, through which around 20 per cent of global oil output and a similar share of liquefied natural gas transits via ships from Middle East producers.
On Monday, Saudi Arabia shut its biggest domestic oil refinery after a drone strike. Qatar halted production of liquefied natural gas, and state-owned QatarEnergy was set to declare force majeure on LNG shipments.
The widening Iran conflict also left 150 ships stranded at anchor around the Strait of Hormuz after a seafarer was killed and at least three tankers were damaged.
The disruptions highlight the risks to Asia, the world’s biggest oil-consuming region, which sources 60 per cent of its oil from Middle Eastern producers. For instance, an extended disruption of the Strait would push oil prices higher and could cause supply shortages to China and India, the world’s biggest and third-biggest oil importers, forcing countries to tap stockpiles and reducing refinery operations.
In the view of the International Energy Agency (IEA) and other analysts, the oil market is well supplied with additions to supply from producers such as the United States, Guyana and the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) expected to outpace global demand this year.
Eight members of OPEC+ agreed on Sunday to raise oil output by 206,000 barrels per day in April.
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