Economy
Why It’s Impossible to Sell Petrol Below N800 per Litre—NNPC
By Dipo Olowookere
The hope of Nigerians getting premium motor spirit (PMS), commonly known as petrol, below N800 per litre, at least for now when the price of crude oil is less than $80 per barrel and the official exchange rate of the Naira to the Dollar is above N1,600/$1 at the currency market, may have been dashed.
This is because the Chief Financial Officer (CFO) of the Nigerian National Petroleum Company (NNPC) Limited, Mr Adedapo Segun, has said the price of the commodity from unrefined crude oil is about N800 per litre.
He made this revelation while speaking on Channels Television’s Sunrise Daily on Wednesday, monitored by Business Post.
According to him, this reality might make it impossible for the company to sell PMS to Nigerians at that price because the cost of getting the final product must be added to arrive at the actual price of petrol.
“This pricing conversation is an interesting one. What are the components of the price? I just told you that the crude [oil] unrefined is N800 per litre, a barrel of crude is about $80 (actually at $72 per barrel as of Wednesday), give or take, you have about 159 litres [of PMS) in a barrel of crude, let’s approximate it to 160 litres, that gives you 50 cents per litre [and] at N1,600 per Dollar, that’s N800 per litre.
“So, the crude itself, unrefined, is N800 per litre. Then you talk about the refiner’s margin, he has to make some money and has costs like operating the plant and other overhead costs. When you are done with these costs, you move to the wholesalers.
“[The product] is transported either by vessel or trucks. The transporter also has his margin as well as the retailer. There are also costs for the regulators and other statutory fees to be paid.
“When you look at all of these costs, what will the Port Harcourt refinery do differently than what Dangote Refinery for example is doing today?
“The only difference would be that it is closer to the people of Port Harcourt and reduces the cost of transporting things like PMS from Dangote Refinery in Lagos to Port Harcourt. That is where the savings would come, but that is very marginal. The cost of transportation is very marginal in the cost-build-up for PMS,” he said.
However, he noted that what the refineries will do to Nigeria is to create competition based on market conditions.
At the moment, the price of PMS at NNPC retail stations is N1,025 per litre in Lagos, while independent marketers sell between N1,040 per litre and N1,060 per litre.
Last week, Dangote Refinery announced a slash in its ex-depot price to N970 per litre from N990 per litre.
By Adedapo Adesanya
There was a 0.92 per cent correction at the NASD Over-the-Counter (OTC) Securities Exchange on Tuesday, February 17, pushed by declines in the share prices of 11 Plc and Central Securities Clearing System (CSCS) Plc.
11 Plc lost N28.80 during the session to trade at N263.00 per share compared with the previous day’s N291.80 per share, and CSCS Plc weakened by N4.84 to N75.25 per unit from N80.09 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slid by 36.87 points to 3,964.55 points from 4,001.42 points, and the market capitalisation lost N22.06 billion to end N2.372 trillion compared with Monday’s value of N2.394 trillion.
Business Post reports that there were five price gainers yesterday, which could not lift the market.
They were led by FrieslandCampina Wamco Nigeria Plc, which appreciated by N5.89 to N77.24 per share from N71.35 per share, First Trust Mortgage Bank Plc grew by 8 Kobo to 90 Kobo per unit from 82 Kobo per unit, Geo-Fluids Plc increased by 8 Kobo to N3.58 per share from N3.50 per share, Lagos Building Investment Company (LBIC) Plc gained 7 Kobo to close at N3.48 per unit versus N3.41 per unit, and Acorn Petroleum Plc added 2 Kobo to sell at N1.33 per share compared with the previous day’s N1.31 per share.
During the session, the volume of transactions slid 91.0 per cent to 4.2 million units from 46.2 million units, the value of trades declined 88.4 per cent to N61.9 million from N532.8 million, and the number of deals shrank 2.3 per cent to 43 deals from 44 deals.
CSCS Plc remained the most active stock by value (year-to-date) with 31.9 million units exchanged for N1.9 billion, trailed by Resourcery Plc with 1.05 billion units worth N408.6 million, and Geo-Fluids Plc with 71.8 million units valued at N299.1 million.
The most traded stock by volume (year-to-date) remained Resourcery Plc with 1.05 billion units sold for N408.6 million, followed by Geo-Fluids Plc with 71.8 million transacted for N299.1 million, and CSCS Plc with 31.9 million units traded for N1.9 billion.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited suffered a 0.47 per cent decline on Tuesday a day after hitting all-time highs in its key performance barometers.
This was influenced by profit-taking in Nigerian stocks, as investors cashed out from the gains recorded in the past trading sessions.
According to data, the All-Share Index (ASI) was down by 899.50 points during the session to 189,362.94 points from the preceding session’s 190,262.44 points, and the market capitalisation decreased by N577 billion to N121.553 trillion from the N122.130 trillion achieved a day earlier.
Business Post reports that the sell-offs were intense yesterday as four of the sectors tracked ended in the red.
The consumer goods space improved by 2.54 per cent, but this was not enough to save Customs Street from crumbling when market activity ended at 2:30 pm.
The banking index was down by 3.69 per cent, the insurance space tumbled by 0.57 per cent, the industrial goods counter depleted by 0.50 per cent, and the energy sector dipped 0.06 per cent.
Despite the loss, the market breadth index remained positive after the bourse closed with 44 price gainers and 40 price losers, implying strong investor sentiment.
The trio of Mecure, SAHCO, and Zenith Bank gave up 10.00 per cent each to trade at N93.60, N117.00, and N80.55 apiece, while RT Briscoe depreciated by 9.95 per cent to N14.12, and Tripple G crashed by 9.77 per cent to N6.00.
Conversely, ABC Transport zoomed off by 9.94 per cent to N9.07, Zichis jumped 9.93 per cent to N13.06, Red Star Express appreciated by 9.87 per cent to N29.50, Meyer grew by 9.81 per cent to N22.95, and Japaul increased by 9.78 per cent to N3.03.
As for the activity chart, investors traded 1.2 billion stocks worth N60.2 billion in 86,607 deals compared with the 1.1 billion stocks valued at N64.0 billion transacted in 64,821 deals on Monday, representing a fall in the trading value by 5.94 per cent, and a surge in the trading volume and number of deals by 9.09 per cent and 33.61 per cent apiece.
Access Holdings ended the session as the busiest equity after the sale of 103.5 million units for N2.7 billion, Zenith Bank traded 93.1 million units valued at N8.0 billion, Japaul transacted 73.8 million units for N223.6 million, First Holdco exchanged 54.3 million units worth N2.6 billion, and Secure Electronic Technology sold 45.9 million units valued at N83.3 million.
By Adedapo Adesanya
It was another wonderful day for the Nigerian Naira in the different segments of the foreign market (FX) market on Tuesday, February 17, as it appreciated against the United States Dollar at the close of business.
In the parallel market, it improved its value on the greenback by N30 to sell for N1,390/$1 compared with the previous day’s rate of N1,420/$1, and at the GTBank forex desk, it gained N4 to trade at N1,363/$1 versus the preceding session’s N1,367/$1.
As for the official market, which is known as the Nigerian Autonomous Foreign Exchange Market (NAFEX), the local currency gained N11.82 or 0.88 per cent to close at N1,335.96/$1 versus Monday’s price of N1,347.78/$1.
In the same segment of the market, the domestic currency chalked up N32.43 against the Pound Sterling to finish at N1,806.75/£1 compared with the previous day’s N1,839.18/£1, and gained N18.82 on the Euro to close at N1,579.24/€1 compared with the N1,598.06/€1 it was traded a day earlier.
Improved foreign exchange supply levels following recent high demand pressures helped to sustain the currency’s advance. A portion of the delayed demand was eliminated with licensed Bureau De Change (BDC) businesses fully helping to alleviate any development.
While other supply sources, including exporters, non-bank corporations, and other market actors, pause stoked pressures on the exchange rate, their presence is anticipated to increase liquidity and flow.
Foreign reserves were last reported at $47.80 billion after appreciating by $135.75 million. The build-up in reserves has been supported by favourable external conditions, including stronger oil-related inflows and improved FX market stability.
The market is looking forward to a rate cut when the Monetary Policy Committee (MPC) meets next week after inflation decelerated further to 15.10 per cent.
Meanwhile, the cryptocurrency market was down as software stocks continued to plunge, creating a ripple effect on the digital assets.
Market analysts noted that consolidation is expected as crypto searches for a new narrative strong enough to pull capital back from AI stocks and commodities.
Litecoin (LTC) declined by 1.8 per cent to $53.99, Bitcoin decreased by 1.7 per cent to $67,446.46, Cardano (ADA) dropped 1.5 per cent to trade at $0.2810, Binance Coin (BNB) slumped 1.4 per cent to $617.60, Solana (SOL) depreciated by 0.9 per cent to $84.97, Ripple (XRP) shrank by 0.7 per cent to $1.47, and Dogecoin (DOGE) went down by 0.04 per cent to $0.1005.
On the flip side, Ethereum (ETH) appreciated by 0.2 per cent to $1,992.22, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
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