Economy
Petrol Product Marketers Lament Use of Dollar for Local Transactions
By Adedapo Adesanya
The major downstream marketers under the aegis of the Major Energies Marketers Association of Nigeria (MEMAN) have once again called for the de-dollarisation of Nigeria’s downstream supply chain.
The group said that the country’s petroleum products distribution and supply chain may face more challenging complexities based on current foreign exchange (FX) market intricacies.
The Executive Secretary of the association, Mr Clement Isong, disclosed this at a media forum on Thursday in Lagos, noting that uncertainties in the Nigerian FX market have stopped members from embarking on the importation of Premium Motor Spirit (PMS), otherwise known as petrol.
He said that it is not easy to put together a correct mathematical calculation of the product’s landing cost to further determine the appropriate pump price.
The Executive Secretary while sharing his members’ position on the present industry value chain conundrum said their investment is not fully protected with the dollarisation of certain charges.
“The market and consumers are not immune to government policy that allows Nigeria Ports Authority, NPA, and the Nigerian Maritime Administration and Safety Agency (NIMASA) continuous charges in dollars, said Isong.
He also noted that although marketers receive products from Nigerian National Petroleum Company (NNPC) Trading Limited, ship-to-ship products offload is transacted in Dollars all of which pushes up the cost of the pump price.
“We are presently concerned about sustainability, efficiencies, and affordability of energy for Nigerians and we are encouraging the shift to energy transition specifically into gas space.” Mr Isong said.
Giving further analysis, Mr Isong said though the federal government has been faithful in its avowed intervention process since it exited the petrol subsidy regime, the Dollarisation policy is weakening the industry and discouraging investment.
He placed the blame mostly on fluctuating Dollar movement and the unpredictability of the rate, saying that marketers pay government agencies like the Nigerian Ports Authority (NPA) and NIMASA about $10 per metric ton, and given the current exchange rate would translate to a higher pump price.
Analysing the forex market impact on the business, he said in 2023 when President Bola Tinubu removed the subsidy, and with the exchange rate at that time the cost of a litre was about N4.85 and with the Dollar at about N1,600 today it has added up to about N11.83 a litre.
He said for Ship-to-Ship (STS) at $30 per metric ton which was N14.54 today with the Dollar at N1,600 that has pushed it up to N28.44 which is adding up to the pump price.
On the transportation side, Mr Isong said even with separate negotiations by marketers, transporters charge between an average of N5 to N8 per litre more.
He said with the unbearable rising cost, the association’s ongoing advocacy is towards leveraging gas as an alternative source of energy.
The ES advised depot operators and filing stations to consider moving to use Compressed Natural Gas and other renewable energy sources like solar in other to break even and operate efficiently.
Clarifying the issues of return of subsidy, Mr Isong, said the industry is witnessing consistent intervention initiatives by the government which perhaps the public may have misconstrued as subsidy payment.
He said President Tinubu, in July 2023 promised that the administration will continue monitoring the effects of the exchange rate and inflation on petrol prices and when necessary, they will intervene.
“We have seen those interventions at different times and it provides a level of stability but our advocacy is to encourage a paradigm shift to reduce operating costs. Trucks are encouraged to move from diesel to CNG, depots and retail outlets to move from diesel to CNG and/or solar energy,” he explained.
By Dipo Olowookere
Renewed buying interest raised the Nigerian Exchange (NGX) Limited by 0.33 per cent on Monday, with gains recorded in almost all the major sectors of the bourse at the close of transactions.
According to data harvested by Business Post, the insurance counter expanded by 0.62 per cent, the banking index grew by 0.59 per cent, the energy sector appreciated by 0.40 per cent, and the consumer goods space improved by 0.10 per cent, while the industrial goods segment closed flat.
When the closing gong was struck by 4 pm to signify the close of business on Customs Street, the All-Share Index (ASI) was up by 1,113.76 points to 243,707.07 points from 242,593.31 points, and the market capitalisation chalked up N714 billion to close at N156.308 trillion compared with the previous session’s N155.594 trillion.
Interest in Nigerian stocks yesterday resulted in a rise in the activity level, with the trading volume soaring by 17.86 per cent to 717.2 million units from 608.5 million units. The trading value advanced by 77.19 per cent to N56.7 billion from N32.0 billion, and the number of deals surged by 36.22 per cent to 73,321 deals from 53,826 deals.
FCMB was the busiest stock during the trading day, with a turnover of 152.3 million units worth N1.8 billion, Premier Paints exchanged 61.0 million units valued at N135.3 million, Dangote Cement traded 34.7 million units for N29.7 billion, The Initiates sold 32.8 million units worth N1.0 billion, and Jaiz Bank transacted 32.6 million units valued at N293.3 million.
Yesterday, the market breadth index was positive after the exchange closed with 37 price gainers and 28 price losers, representing strong investor sentiment.
International Energy Insurance gained 9.92 per cent to settle at N7.98, the Initiates added 9.91 per cent to its share price to quote at N32.15, ABC Transport garnered 9.68 per cent to trade at N6.80, Abbey Mortgage Bank grew by 9.63 per cent to close at N10.25, and Linkage Assurance soared by 9.36 per cent to N1.87.
On the flip side, Fidson Healthcare gave up 10.00 per cent to finish at N122.85, Academy Press crashed by 9.70 per cent to N7.45, RT Briscoe depreciated by 9.43 per cent to N13.45, SUNU Assurances tumbled by 9.37 per cent to N4.06, and Learn Africa decreased by 8.70 per cent to N10.50.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a marginal 0.05 per cent drop on Monday, June 8, depleting the market capitalisation by N1.27 billion to N2.606 trillion from N2.607 trillion, and cutting the Unlisted Security Index (NSI) by 2.12 points to 4,356.20 points from the previous 4,358.32 points.
The contraction witnessed during the session was triggered by a price loser, which overpowered that gains recorded by two securities on the trading platform.
Data indicated that MRS Oil Plc lost N6 at the close of business to settle at N165.00 per share compared with last Friday’s price of N171.00 per share.
Conversely, Lighthouse Financial Services Plc added 9 Kobo to sell at N1.03 per unit versus 94 Kobo per unit, and Central Securities Clearing System (CSCS) Plc appreciated by 8 Kobo to N78.48 per share from N78.40 per share.
The volume of securities traded by investors yesterday soared by 51.9 per cent to 213,188 units from 140,345 units, and the value of securities increased by 12.6 per cent to N20.2 million from N17.9 million, while the number of deals executed fell by 7.4 per cent to 25 deals from 27 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 64.8 million units exchanged for N4.4 billion.
GNI Plc also remained as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Adedapo Adesanya
The Naira opened the new trading week on a negative note on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEX) and the black market.
At the parallel market, the Nigerian currency weakened against the US Dollar by N5 to sell for N1,380/$1 compared with the preceding session’s rate of N1,375/$1, and at the GTBank FX desk, it shed N1 to trade at N1,373/$1 versus N1,372/$1.
At the official market, it lost 63 Kobo or 0.05 per cent against the Dollar during the session to close at N1,362.84/$1, in contrast to last Friday’s value of N1,362.21/$1.
However, the Nigerian Naira gained N2.30 against the Pound Sterling at the spot market yesterday, quoting at N1,821.29/£1 compared with the previous rate of N1,823.59/£1, and improved against the Euro by 23 Kobo to settle at N1,574.35/€1 versus N1,574.58/€1.
Data from the Central Bank of Nigeria (CBN) showed that interbank forex turnover increased to $92.248 million across 90 deals, from $73.565 million last Friday.
On the policy front, participants believed that the application of the fourth edition of the Foreign Exchange Manual of the central bank, which introduces updated guidelines for foreign exchange transactions and tightening compliance requirements for authorised dealers and market participants, will enhance market flexibility and ease previous restrictions.
Meanwhile, the cryptocurrency market snapped from recent declines, jolted by Strategy’s purchase of 1,550 Bitcoin for approximately $101 million, increasing its total holdings to 845,256 BTC. The company raised $181 million through common stock sales, using the proceeds to fund the bitcoin purchase and increase its cash reserves to $1 billion, pushing the price of the coin higher by 3.2 per cent to $63,731.69.
Cardano (ADA) appreciated by 8.4 per cent to $0.1738, Ethereum (ETH) rose by 5.2 per cent to $1,711.54, Solana (SOL) expanded by 5.1 per cent to $67.82, and Ripple (XRP) improved by 4.9 per cent to $1.18.
Further, Dogecoin (DOGE) jumped by 4.3 per cent to $0.0873, Binance Coin (BNB) soared by 2.7 per cent to $609.50, and TRON (TRX) increased by 0.7 per cent to $0.3274, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $0.9997 and $0.9998, respectively.
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