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NNPC Pushes For N150 Per Litre For Petrol

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NNPC Pushes For N150 Per Litre For Petrol

petrol-pump-price

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/

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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Economy

Unlisted Securities Depreciate by 0.41% Friday

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Unlisted Securities Market

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange returned to the bearish zone on Friday, January 21 after back-to-back stalemates as it depreciated by 0.41 per cent, driven by the negative price movement in Central Securities Clearing Systems (CSCS) Plc.

CSCS Plc closed at N19.38 per unit after moving down by 57 kobo or 2.7 per cent from its previous day’s value of N19.90.

The depreciation in this stock weakened the market capitalisation by N2.6 billion to N630.46 billion from N633.06 billion and slowed the NASD Unlisted Securities Index (NSI) by 3.07 points to wrap the session at 744.54 points compared with 747.61 points of the previous session.

However, there was a surge in the volume of securities traded at the bourse as investors exchanged 4.1 million units, 103,160 per cent higher than the 4,000 units of securities transacted a day earlier.

Likewise, the value of shares traded at the session swelled to N86.9 million, which by evaluation is 11,227.6 per cent higher than N767,100 posted on Thursday.

These transactions were carried out in eight deals, 300 per cent higher than the two deals carried out at the preceding trading session.

Business Post reports that the unlisted securities market wrapped the day without a price gainer.

At the close of trading, the most traded stock by volume on a year-to-date basis was CSCS Plc with 653.6 million units worth N13.7 billion, VFD Group Plc followed with 916,161 units valued at N331.5 million, while Friesland Campina WAMCO Nigeria Plc has traded 205,566 units of its stocks valued at N24.3 million.

Also, CSCS ended the trading session as the most traded stock by value on a year-to-date basis with the sale of 653.6 million units of its securities valued at N13.7 billion, followed by VFD Group Plc with a turnover of 916,161 units worth N331.5 million, while  Friesland Campina WAMCO Nigeria Plc has transacted 205,566 units of its stocks valued at N24.3 million.

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Economy

Naira Falls at I&E as Bears Wipe $1trn from Crypto Market

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Future of the Crypto Market

By Adedapo Adesanya

The Naira recorded a 37 kobo or 0.09 per cent loss against the US Dollar at the Investors and Exporters (I&E) segment of the foreign exchange (forex) market as it traded at N415.10/$1 compared with N414.73/$1 it was traded on Thursday.

It was observed that the Naira came under pressure during the trading session with the value of transactions rising by 56.2 per cent or $60.7 million at the market window to $168.62 million from the preceding day’s $107.92 million.

In the same vein, the local currency depreciated against the American currency at the interbank segment of the market yesterday by 5 kobo or 0.1 per cent to N411.95/$1 from the previous day’s N411.90/$1.

However, the local currency lost 60 kobo against the Pound Sterling to trade at N552.75/£1 in contrast to N553.35/£1 it closed on Thursday and against the Euro, it depreciated by N2.64 to N448.79/€1 from N446.15/€1.

In a related development, the crypto market bled yesterday, with the Federal Reserve intending to withdraw stimulus from the market, riskier assets in the world such as the assets have suffered from over $1 trillion lost in market capitalisation so far.

Russia also added to the fear that seems to be gripping cryptocurrencies as the country’s central bank issued a harsh report on cryptocurrencies, including a potential ban on mining and trading.

Bitcoin (BTC), the largest digital asset, lost more than 9 per cent on Friday and dropped below $36,000, its lowest level since July.

Since its peak in November, it has lost over 45 per cent of its value as it traded at the Naira equivalent of N20,376,819.45.

Other digital currencies have suffered just as much, if not more, with Dash (DASH) plunging 19.7 per cent to trade at N57,825.35, Litecoin (LTC) moved down by 15.9 per cent to trade at N61,392.61, while Binance Coin (BNB) recorded a 15.6 per cent to trade at N152,054.69.

Cardano (ADA) went south by 13.1 per cent to trade at N650, Ripple (XRP) fell by 13.0 per cent to trade at N350.32, Dogecoin (DOGE) declined by 11.3 per cent to sell at N84.80, Tron (TRX) depreciated by 5.9 per cent to N35.99, Ethereum (ETH) made a 5.0 per cent loss to sell at N1,699,900.00, while the US Dollar Tether (USDT) made a 0.2 per cent depreciation to sell for N575.01.

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Economy

Oil Again Falls Under Pressure of US Inventories Rise, Profit Taking

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Nigerian Oil Industry

By Adedapo Adesanya

Oil prices closed in the bearish territory on Friday, falling for another session pressured by an unexpected rise in US crude and fuel inventories after investors took profits after the benchmarks touched seven-year highs earlier in the week.

Brent crude dropped 49 cents or 0.55 per cent to trade at $87.89 per barrel while the US West Texas Intermediate (WTI) lost 41 cents or 0.48 per cent to settle at $85.14 per barrel.

However, both crude benchmarks rose for a fifth week in a row, gaining around 2 per cent this week, showing that prices were up more than 10 per cent so far this year on concerns over tightening supplies.

The Energy Information Administration (EIA) reported the first US crude build since November in the week just as fuel inventories hit an 11-month high in the world’s largest oil consumer.

Crude inventories rose by 515,000 barrels in the week to January 14 to 413.8 million barrels, compared with analysts’ expectations of a 938,000-barrel drop.

Earlier in the week, both Brent and WTI rose to their highest levels since October 2014.

But the latest pullback happened due to a combination of pre-weekend profit-taking and the absence of fresh bullish catalysts.

Analysts also said they expect the current pressure on prices to be limited owing to supply concerns and rising demand.

Tensions in Eastern Europe and the Middle East are also heightening fears of supply disruption as top US and Russian diplomats made no major breakthrough at talks on Ukraine on Friday.

There was, however, an agreement to keep talking to try to resolve a crisis that has stoked fears of a military conflict.

Amid these, there are forecasts that prices will perform their best in recent times this year due to low spare OPEC+ capacity, low inventories and geopolitical tensions rising.

Analysts at Bank of America said they expect to see Brent at around $120 a barrel in mid-2022.

UBS expects crude oil demand to reach record highs this year and for Brent to trade in a range of $80-$90 a barrel for now.

Morgan Stanley has raised its Brent price forecast to $100 a barrel in the third quarter, up from its previous projection of $90.

Meanwhile, in the United States, energy firms cut oil rigs this week for the first time in 13 weeks.

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