Fuel import: PPPRA engages central bank on forex for oil marketers

The Petroleum Products Pricing Regulatory Agency (PPPRA), Monday said it is engaging with the Central Bank of Nigeria (CBN) on ways to make foreign exchange accessible to private oil marketing companies seeking to import Premium Motor Spirit (PMS), also known as petrol, and other petroleum products.

In a statement in Abuja, Executive Secretary of the PPPRA, Mr. Abdulkadir Saidu, disclosed that the engagement with the CBN was aimed at determining the applicable Foreign Exchange rates for the importation of petroleum products and modality for accessing the applicable Foreign Exchange window by the Marketers.

He said, “This rate is reflected on the pricing template to determine the expected open market price of the product. This means that going forward, the guiding price to be advised, will be determined based on the rates quoted by CBN.

“The price is expected to guide the sale of PMS in Nigeria. In fact, we plan to extend the same pricing mechanism to Aviation Turbine Kerosene (ATK), Automotive Gasoline Oil (AGO), among others. The whole essence of the price band is to ensure price efficiency that is beneficial to both the consumers and oil marketers.”

Saidu maintained that the country’s existing refineries were expected to play key roles in the current fuel pricing regime, adding that the policy would also create immense opportunity for increased private sector participation in the industry.

He said, “The Nation’s refineries are required to key into the new pricing regime just like all other operators both private and public. The new regime will open up the Oil and Gas Sector for more private players and investments in refineries, storage facilities and transportation.

“At the end of the day we expect to see more private players operating in the industry. The liberalization of the entire industry will make it possible for private investors to recoup their investments, leading to a more vibrant downstream sector.

“However, in order for the nation’s refineries to continue producing fuels, the authorities in charge of the refineries need to fix the refineries and ensure they come back on stream at optimal level. We believe the upcoming Dangote Refinery and other modular refinery projects nationwide will be able to key into the new pricing regime.”

Saidu explained that the decision of the Federal Government to adopt the current PMS pricing regime was borne of the need to conserve scarce resources and the pressure the collapsing prices of crude oil in the international market brought on the revenue of the government.

He said, “Furthermore, the plunge in global crude prices made it increasingly difficult for Government to finance the 2020 National budget as it was predicated on a crude price of $57 per barrel. The low crude oil prices, therefore, presented the opportunity to address the lingering challenges associated with the Under/Over-Recovery regime and free up vital funds required to develop in other key sectors of the economy.

“Additionally, the new initiative is expected to stimulate private investment and growth in the downstream sector and encourage the resumption of products importation by Oil Marketing Companies, translating to more job creation as many depots and facilities that were dormant would now become active.”

The PPPRA chief executive added that: “What we have in place is a market reflective pricing system. Petroleum products prices will be adjusted in line with market realities and the result is what we see presently with prices on the downward slide. Accordingly, price will naturally be adjusted to reflect a true picture of market fundamentals at any particular period (high or low).

“The liberalized pricing regime will ensure a competitive and more efficient PMS market that guarantees reasonable returns to operators and ensure consumers pay appropriate prices in line with market reality and ensure they are not over-charged.”

Source: Today.ng

FG offers discounted crude oil below $4 amid glut

In a desperate effort to offload and sell stranded barges of oil, the Federal Government, yesterday, offered oil traders huge discounts on Nigerian crude oil grades below the $10 mark, as glut and energy imbalance triggered by the coronavirus hit the oil industry.

Latest prices for most of the government’s crude oil grades for sale in May, showed prices as low as $1.51 while two of Nigeria’s banner grades – Qua Iboe, and Bonny Light will sell at discounts of $3.92 and $3.95 respectively to Dated Brent next month.

Without refining capacity, Nigeria lacks the space to store unwanted supplies at a time the cost of hiring ships to take its supplies to importers has soared because many tankers are being used for floating storage.Advertisement

The discounts are coming after the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mele Kyari, had painted a gloomy picture of the Nigerian economy in the months ahead, appealing to industry captains and Nigerians, to be prepared for very lean times.

According to him, the country has been unable to sell some of its cargoes of crude and liquefied natural gas.

For oil-dependent economies like Nigeria, the challenge of containing community spread amidst the pressure to re-open the economy that is largely informal leaves policymakers in a limbo.

Indeed, IEA’s latest Oil Market Report painted a dire portrait of global demand, but it nevertheless assumes that there is a resurgence in demand close to normal levels by the end of the year.Advertisement

But there are multiple reasons why the global economy may not return to anything close to “normal” even by the end of 2020.

Similarly, traders cautioned that the prices – $10 a barrel or less if the market doesn’t improve still may not tempt enough buyers because of the demand collapse triggered by the coronavirus.

The release of the Nigerian official selling prices was about a week late, while loading plans for June have started to emerge several days later than normal.

The nation’s exports of Qua Iboe crude oil for May, have been revised lower to 153,000 barrels a day (bpd) from the previously planned level of 215,000, while June’s shipments are set at 158,000bpd, according to loading schedules.Advertisement

The dire state of the oil market has meant that despite being so cheap – $50 or $60 a barrel would have been realistic just a few months ago – Nigerian barrels have been selling slowly.

Traders estimated that as of late last week, about 30 out of 65 May-loading cargoes still hadn’t been sold.

The coronavirus has halted swathes of the global transportation system, destroying demand for fuels in the process. Some estimates are that the reduction in demand could have been as big as 35 million bpd, or roughly 35% of global consumption.

Nigeria is one of the countries taking part in a global pact to limit oil production by 9.7 million bpd.

However, crude oil supply from OPEC members has soared by more than 2 million bpd in April to the highest levels since December 2018, oil-flow tracking company Petro-Logistics has said.

The highest OPEC supply in nearly a year and a half is being driven by record oil supply out of OPEC’s top producer and the world’s largest oil exporter, Saudi Arabia, and from the United Arab Emirates (UAE), according to Petro-Logistics.

source: guardian.ng

Oil prices rally as Nigerian crude sells below $10

Oil prices showed signs of recovery Wednesday morning, modestly reversing some of the losses posted this week after storage in the U.S. rose less than expected.

There are hopes that demand will go up as a couple of countries in Europe and some U.S. cities prepare to ease coronavirus lockdowns.

U.S. West Texas Intermediate (WTI) crude rose to a high of $14.40 per barrel, up by 15.4% or $1.90 at 03:33 West African Time.

The gain reduced the 27% fall it recorded in the first two days of the week.

Brent Crude, the benchmark for Nigeria’s oil grades, went up by 4.6% or 93 cents to $21.39 a barrel, further increasing the 2.3% gain posted on Tuesday.

But Financial Times reported Wednesday morning that the Nigerian National Petroleum Corporation was now offering cargoes of Bonny Light and Qua Iboe, two of Nigeria’s main grades, at nearly $4 per barrel below Dated Brent, or close to $10.

The crude inventories of the U.S. expanded by 10 million to 510 million barrels in one week to 24th April according to American Petroleum Institute compared to experts’ forecast of a 10.6 million build.

“It’s a little bit of good news that maybe storages aren’t filling quite as quickly in the U.S. as you would have thought,” said Lachlan Shaw, Head Commodity Research at National Australia Bank.

Regulators in Texas, U.S. biggest oil producer, are expected to vote on 5th May regarding whether to pursue an output cut. Officials in Oklahoma and North Dakota are also considering how to legally allow output cut.

It will increase production cuts of about 10 million barrels per day agreed by the Organisation of the Petroleum Exporting Countries and its Russia-led allies, or around 10% of world production expected to come into force on 1st May.

“The other thing coming through is more detail and a louder groundswell towards plans for removing COVID restrictions, particularly in Europe — in countries like Spain, France, Austria and Switzerland. That’s going to see demand pick up,” Mr Shaw said.

Credit rating agency, Moody’s reviewed its oil price forecast downward on Wednesday, projecting that the WTI would average $30 a barrel in 2020 and $35 in 2021 due to a global recession affecting fuel demand.

Moody’s said it envisaged abundant oil supply in storage to keep prices low through 2021.

source: Ripples Nigeria

30-04-2020

AGO [/vc_column_text][/vc_column][/vc_row]PORT HARCOURT DEPOTDEPOT PRICEAVIDOR PH/NIPCO₦ 180.0SHORELINK BULK STRATEGIC PH₦ 185.0TULCAN/TSL₦ 185.0MASTERSLIQUID BULK₦ 179.5STOCKGAPNIPCO/SIGMUNDBULK STRATEGIC/NIPCOOVHCONOILSAHARA CALABAR DEPOTDEPOT PRICENORTHWEST₦183.0AMMASCOMAINLAND₦ 172.9SAMON PETFYNEFIELD₦ 173.0ALKANES₦ 173.0YSG (YOUNG SHALL GROW)₦ 175.0BLOKKS HYDEAZMAN/NIPCO₦183.0UGO HANNAH WARRI DEPOTDEPOT PRICERAINOIL OGHARANEPAL OIL & GAS / NNPC₦173.0PRUDENT OGHARA₦158.5MATRIX₦162.0CYBERNETICSTAURUS₦162.0OPTIMA₦161.0PINNACLEFRADRO₦ 165.0AYM SHAFA₦ 160.0 LAGOS DEPOTDEPOT PRICEAFRICA TERMINALS₦ 170.0IBACHEM₦ 170.0IBETO₦ 171.0MRS₦ 161.0LEIGHTEN PETINDEXETERNAFOLAWIYOOBATCHIPETRAHAMANIYYAA ZNIPCO₦ 161.0AITEOAIPEC₦ 168.0SAHARA₦ 170.0EMADEB ENERGYA.A...

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