Economy
NNPC Lying About Reason for Fuel Scarcity—Oil Marketers
By Dipo Olowookere
Nigerian National Petroleum Corporation (NNPC) has been accused of not being truthful to Nigerians on the main cause of the present shortage of Premium Motor Spirit (PMS), otherwise known as petrol, across the country.
Oil marketers, under the umbrella of Depot and Petroleum Products Marketers Association (DAPPMA), in a statement dated Monday, December 25, 2017, denied claimed by government that they were behind the situation through hoarding of the product.
In the statement signed by the Executive Secretary of DAPPMA, Mr Olufemi Adewole, it was explained that the main reason for the shortage was because the state-owned oil firm was not importing enough fuel that will meet the demand of citizens.
“Some people have blamed marketers for hoarding fuel. Unfortunately, this is so far from the truth. Hoarding fuel is regarded as economic sabotage and we assure all Nigerians that our members are not involved in such illicit acts,” the oil marketers said.
Speaking further, DAPPMA said normally, it imports 65 percent of the country’s consumption with Major Oil Marketers Association of Nigeria (MOMAN) bringing in 15 percent, and the NNPC importing the remaining 20 percent.
The group said however, since October 2017, the NNPC has been the sole importer of petrol into the country.
Giving reason for this, DAPPMA said the landing cost of petrol was now N170 per litre and with the government capping pump price at N145 per litre without room for increment, it was impossible for its members to import fuel into Nigeria and still sell at N145 per litre to Nigerians.
“As it stands today, NNPC has been the sole importer of PMS into the country since October 2017 due to the following reasons’
“We all know that we presently run a fixed price regime of N145 per litre for PMS without any recourse to subsidy claims, however, we also have no control on the international price of crude oil.
“Current import price of petrol is about N170 per litre, NNPC, which absorbs the attendant subsidy on behalf of the Federal Government, is the importer of last resort.
“We understand that the NNPC meets this demand largely through its DSDP framework; however, due to price challenges on the DSDP platform, some participants in the scheme failed to meet their supply quota of refined petroleum products, especially PMS, to NNPC. This is the main reason for this scarcity.”
“The international price of PMS went up during the Hurricane Katrina and has not dropped below $600 per metric tonne.
“The exchange rate of the Dollar to the Naira is N306 for PMS imports and also interest rate our banks charge is above 25 percent.
“Landing cost of PMS in Nigeria, based on the scenario above is more than N145 per litre, which means any of our member that imports would have to resort to subsidy claims, a policy already jettisoned by the Federal Government,” it said.
Reacting to the claims by NNPC that it has enough fuel to meet the demands on Nigerians, the association said, “It is on record that anytime the NNPC assumes the role of sole importer, there are issues of distribution, because it is marketers who own 80 percent of the functional receptive facilities and retail outlets in Nigeria.
“While we cannot confirm or dispute NNPC’S claims of having sufficient product stock, we can confirm that the products are not in our tanks and as such cannot be distributed. If the products are offshore, then surely, it cannot be considered to be available to Nigerians.”
It further noted that, “NNPC imports and distributes through DAPPMA, Major Oil Marketers Association of Nigeria (MOMAN), and Independent Petroleum Marketers Association of Nigeria (IPMAN).
“Our members pay PPMC/NNPC in advance for petroleum products, and fully paid up PMS orders that have neither been programmed nor loaded is in excess of 500,000 metric tonnes, about 800 million litres, as at today, and enough to meet the nation’s needs for 19 days at a daily estimated consumption of 35 million litres.”
Concluding, DAPPMA said, “Our members’ depots are presently empty! However, if the PPMC/NNPC can provide us with PMS, we are ready to do 24 hours loading/truck out to alleviate the sufferings of Nigerians until these fuel queues are totally eliminated.
“Fuel marketers remain committed to the progress of the nation and its citizenry as therein lies our own profitability and fulfilment.”
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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