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
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.80 per cent gain on Friday, December 27, helped by two price gainers, FrieslandCampina Wamco Nigeria Plc and Geo-Fluids Plc.
FrieslandCampina Wamco Nigeria Plc improved its value by N3.84 to trade at N43.84 per unit compared with the preceding trading session’s N40.00 per unit and Geo-Fluids Plc gained 24 Kobo to close at N4.85 per share, in contrast to Tuesday’s closing price of N4.61 per share.
However, the share price of Industrial and General Insurance (IGI) Plc shrank during the last trading day of the week by 2 Kobo to 15 Kobo per unit from 17 Kobo per unit.
At the close of transactions, the market capitalisation increased by N8.24 billion to wrap the session at N1.040 trillion versus the preceding trading day’s N1.032 trillion and the NASD Unlisted Security Index (NSI) expanded by 24.02 points to 3,035.61 points from the 3,011.59 points recorded in the previous session.
The volume of securities traded in the first session after the Christmas break surged by 41.8 per cent to 7.5 million units from the 5.3 million units recorded in the preceding session, the value of shares traded yesterday increased by 117.4 per cent to N51.7 million from N23.8 million, and the number of deals went up by 200 per cent to 32 deals from the eight deals carried out on Tuesday.
When the alternative stock market ended for the session, Geo-Fluids Plc maintained its position as the most active equity by volume on a year-to-date basis with 1.7 billion units sold for N4.0 billion, followed by Okitipupa Plc with 752.4 million units valued at N7.8 billion, and Afriland Properties Plc with 297.7 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, trailed by Okitipupa Plc with 752.4 million units valued at N7.8 billion, and Afriland Properties Plc with 297.7 million units sold for N5.3 billion.
By Dipo Olowookere
The first trading session after the 2024 Christmas break on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note on Friday.
The local stock exchange closed lower by 0.05 per cent during the trading session as the market participants embarked on profit-taking.
The sell-offs were prominent in the banking and energy sectors, crumbling by 1.16 per cent and 0.21 per cent, respectively.
However, the insurance index maintained its upward movement with a 2.31 per cent growth, as the consumer goods and industrial goods counters gained 0.15 per cent and 0.01 per cent apiece.
At the close of business, the All-Share Index (ASI) went down by 52.73 points to 102,133.30 points from 102,186.03 points and the market capitalisation declined by N32 billion to N61.912 trillion from N61.944 trillion.
Despite the loss suffered by the bourse, investor sentiment was bullish after 45 equities ended on the gainers’ chart and 18 equities finished on the losers’ table, indicating a positive market breadth index.
Honeywell Flour shed 9.09 per cent to trade at N6.30, RT Briscoe waned by 5.66 per cent to N2.50, Neimeth slowed by 5.47 per cent to N1.90, Eterna gave up 5.00 per cent to settle at N28.50, and Tantalizers soured by 4.44 per cent to N1.72.
Conversely, University Press expanded by 10.00 per cent to N3.85, Coronation Insurance grew by 10.00 per cent to N1.87, Universal Insurance rose by 10.00 per cent to 55 Kobo, Ikeja Hotel jumped by 9.95 per cent to N12.15, and May and Baker inflated by 9.94 per cent to N9.40.
The busiest stock yesterday was UBA with 41.7 million units valued at N1.5 billion, Access Holdings traded 35.4 million units worth N871.3 million, Zenith Bank exchanged 33.3 million units valued at N1.5 billion, GTCO transacted 22.9 million units worth N1.3 billion and Jaiz Bank sold 19.2 million units for N57.2 million.
When trading activities ended for the session, the value of shares went down by 4.37 per cent to N17.5 billion from N18.3 billion, the volume of transactions increased by 4.61 per cent to 451.7 million shares from 431.8 million shares, and the number of deals surged by 49.97 per cent to 12,551 deals from 8,369 deals.
By Adedapo Adesanya
The value of the Naira appreciated against the US Dollar by 0.16 per cent or N2.15 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, December 27 as festive activities wound down in the country.
During the last trading session of the Christmas week, the domestic currency was exchanged at N1,538.50/$1 in the official window, in contrast to the preceding session’s N1,540.65/$1.
The official market closed on Wednesday (December 25) and Thursday (December 26) for the holidays but resumed yesterday, with two more trading sessions left in the year.
December activities are winding down and the influx of FX from foreigners in the country will start reducing, with more demand for the Dollar set to occur in the coming days.
At the spot market on Friday, the local currency depreciated against the British Pound Sterling by N1.31 to wrap the session at N1,934.22/£1 compared with Tuesday’s closing price of N1,932.91/£1 and against the Euro, it lost N5.51 to sell for N1,605.47/€1, in contrast to the previous session’s N1,599.96/€1.
A look at the parallel market showed that the Nigerian Naira maintained stability against the greenback yesterday at N1,640/$1.
The Naira for most of December trended upward since the Central Bank of Nigeria (CBN)-backed Electronic Foreign Exchange Matching System (EFEMS) launched on December 2.
The platform which set new guidelines for authorised Foreign Exchange (FX) dealers made it harder to sell at inflated rates to avoid CBN’s punishment.
Last week, to further alleviate pressure on the official market, the apex bank granted Bureaux de Change (BDC) operators temporary access to NAFEM, which is the official market, as part of efforts to further strengthen the Naira in the currency market.
In the cryptocurrency market, there was a mixed outcome as the landscape cooled ahead of next year’s promises, including a more relaxed crypto environment in the US.
Litecoin (LTC) declined by 3.4 per cent to $99.59, Solana (SOL) shed 1.4 per cent to sell at $185.53, Bitcoin (BTC) slid by 1.00 per cent to $94,327.94, Ethereum (ETH) slumped by 0.4 per cent to $3,337.53, the US Dollar Tether (USDT) fell by 0.06 per cent to $0.9983, and the US Dollar Coin (USDC) lost 0.01 per cent to settle at $0.9998.
On the flip side, Dogecoin (DOGE) rose by 0.9 per cent to $0.3159, Ripple (XRP) gained 0.2 per cent to quote at $2.16, Cardano (ADA) also improved by 0.2 per cent to $0.8076 and Binance Coin (BNB) went up by 0.06 per cent to $696.24.
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