Category: News

Brent Oil jumped towards $67 a barrel Tuesday with investment banks and traders predicting the market will tighten further and push prices higher. Futures in New York jumped 1.6% on Tuesday after climbing more than 4% in the previous session. The market is heading toward what could be the tightest quarter since at least 2000

Source: Business Day

The Nigerian National Petroleum Corporation (NNPC) has assured Nigerians that there is no plan to increase the price of Premium Motor Spirit (PMS) otherwise known as petrol in the month of February 2021.

This comes after the reported rumour of plans to increase the price of petrol due to the continuous rise in the price of crude oil in the international market and the reported hoarding of the product by some depot owners and marketers.

NNPC Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru who reacted to speculation of petrol selling above the official N162 per litre, said that there was no imminent upward review. 

Obateru also assured that the corporation had enough stockpile of petrol to keep the nation well supplied for about 40 days. 

He urged petroleum products marketers not to engage in the hoarding of PMS in order not to create artificial scarcity and unnecessary hardship for Nigerians.

He said;  

“NNPC has not increased its ex-depot price. I am certain that NNPC is not likely to increase its ex-depot price in February.

“We have sufficiency for almost forty something days. If people are hoarding or increasing their prices that one is for the DPR to look into.”

source: https://www.oilandgasgoodness.com/post/nnpc-says-no-plan-to-increase-fuel-price-in-february

The subsidy on Premium Motor Spirit, popularly known as petrol, may have gulped at least N11.20bn in one week as the rise in global oil prices pushed up the landing cost of the product.

On February 5, when oil price neared $60 per barrel, the expected open market price of petrol rose to over N200 per litre, based on the petrol pricing template of the Petroleum Products Pricing Regulatory Agency.

The product is currently being sold at between N160 and N165 per litre at many filling stations in Lagos.

Using an expected open market price of N190 per litre of petrol and an average current pump price of N162 per litre indicates a subsidy of N28 per litre.

With a daily petrol consumption of about 57 million litres and a subsidy of N28 per litre, it means subsidy gulped N1.60bn in a day and N11.20bn in a week (February 5 to 12).

The PUNCH had reported last week that the landing cost of petrol rose to N179.67 per litre on February 5 from N158.53 per litre on January 7, with the expected open market price (pump price) of the product increasing to N202.67 per litre from N181.53 per litre.

Crude oil price accounts for a large chunk of the final cost of petrol, and the deregulation of petrol price by the Federal Government last year means that the pump price of the product will reflect changes in the international oil market.

The rising price of crude oil pushed the cost of petrol quoted on Platts to $543.25 per metric tonne (N157.99 per litre, using N390/$1) last Friday from $480.25 per MT (N139.67 per litre) on January 7.

The international oil benchmark, Brent crude, extended its rally on Monday, rising by $0.88 to $63.31 per barrel as of 7:10pm Nigerian time.

The Nigerian National Petroleum Corporation, which  has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, said last week that Nigerians should prepare for the pain associated with the increase in crude oil price.

According to him, as desirable as the increase in oil price is, it has serious consequences as well on petroleum product prices.

“So we want to take the pleasure and we should as a country be ready to take the pain. Today, the NNPC is taking a big hit from this. We all know that there is no provision in the budget for subsidy. So, somewhere down the line, I believe that the NNPC cannot continue to take this blow. There is no way because there is no provision for it.”

“As a country, let us take the benefits of the higher crude oil prices and I hope we will also be ready to take a little pain on the side of higher product prices.”

The NNPC said in its latest monthly report that to ensure continuous increased PMS supply and effective distribution across the country, a total of 1.72 billion litres of PMS, translating to 57.44 million litres per day were supplied in November.

The corporation said it had continued to diligently monitor the daily stock of PMS to achieve smooth distribution of petroleum products and zero fuel queue across the nation.

Source: Punch

The Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote, has disclosed that the Nigerian Oil and Gas Park in Emeyal 1, Bayelsa State, would be completed in the fourth quarter of 2022.

Speaking after inspecting the construction work at the project site alongside senior management of the board, Wabote said his assessment visit was a prelude to the planned tour by the Minister of State for Petroleum Resources, Chief Timipre Sylva, to the board’s major projects.

A statement from the NCDMB stressed that the oil and gas park projects at Emeyal 1 and Odukpani in Cross River State and the Composite Gas Cylinder Manufacturing facility at Polaku are some of the projects to be visited.

Wabote expressed delight over the quality and speed of work by the wholly Nigerian contractors, noting that their work compared favourably with similar jobs across Nigeria and was evidence that NCDMB was always acting in accordance with its guidelines on patronage of local service companies.

The park is expected to create a low-cost manufacturing hub that will produce equipment components and spare parts to be utilised in the nation’s oil and gas industry when completed.

The board stated that the project started with a ground-breaking ceremony on April 27, 2018, and has now reached about 68 percent completion, with four major structures nearly completed, while foundation work was starting on some buildings and parts of the project.

“We did the ground-breaking ceremony in 2018 and we were practically inside water; but today, we are seeing structures coming up. We still have a long way to go because most of the buildings are getting to the finishing stages while some are just starting. We believe that we will complete this project by Q4, 2022,” the NCDMB boss said.

Explaining the benefit of the park scheme to the nation’s economy, Wabote hinted that the facility would stimulate the manufacturing of oil and gas components in-country and reverse the current trend whereby the sector depended on importation for most of its finished products.

He added that the park would also save the much-needed foreign exchange for the nation and create jobs for the Nigerian people.

“It will also enhance our capacity and bring about technological innovations because most of those manufacturing will be done here. For the community, it will create a lot of jobs and there will be a spin-off effect to other economic activities. The benefits are enormous,” he noted.

He also assured that shortage of electricity would not affect companies that would set up in the park.

“We have been able to conquer the challenge of electricity at this site. We have built a 10megawatts gas plant to guaranty power to the site,” he explained.

Wabote confirmed that Shell Petroleum Development Company (SPDC) was supporting the oil and gas project through a Capacity Development Initiative (CDI).

Shell’s commitment to the project, he stated, included the construction of effluent treatment plant, fire station and acquisition of two fire trucks and to construct a water treatment plant, sewage systems and piping network for water.

Read the original article on This Day.

Marketers of petroleum products under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) have called for a joint action of stakeholders in the Nigeria economy to find ways to mitigate adverse effects of the imminent increase in the price of petrol price.

The marketers’ cartel also canvassed for the replication of the current measure to cut cost of operation in the nation’s oil and gas industry to the entire spectrum of the economy especially governance.

The Chairman of MOMAN and Managing Director of 11Plc, Mr. Tunji Oyebanji, advanced the positions of the association in a statement he presented at a virtual press briefing hosted in Lagos, with the title, “After Deregulation, What Next”.

He said the removal of petrol subsidy and price control would no doubt lead to challenges for Nigerians, adding that debate among stakeholders should now move from the deregulation of downstream sector to fashioning out solutions to the hardship that would be faced by Nigerians.

He said with a fully deregulated downstream industry, the natural fear and anticipation of Nigerians was the increase in the price of transportation, food items and the attendant economic hardships.

According to Oyebanji, solutions to these challenges can only emanate from a collective resolve by all stakeholders to face up to these challenges together.

“We must as a nation debate and share pragmatic and realistic initiatives to mitigate the impact of a pump price increase which could follow a fully deregulated downstream,” he added.

He explained: “MOMAN is calling for a national discourse among all stakeholders including government, labour, civil society organisations, the organised private sector and operators, not on the merits or demerits of petrol subsidy removal, but on the initiatives that can be taken to ease the impact of the subsidy removal on the most vulnerable in our society.

“MOMAN remains committed to the sustainability and institutionalisation of a viable downstream petroleum industry for the social and economic growth of our Country, Nigeria”.

Oyebanji said the association stands with Nigeria and Nigerians through this difficult time and supports the federal government’s promise to pass the Petroleum Industry Bill (PIB) this year and fully deregulate the petroleum downstream sector.

He pointed out that the benefit of a liberalised downstream was the most visible means of growing the economy in the medium to long term.

He said Nigeria could become the refining hub of West and Central Africa and eventually the whole of Africa if it sticks to the path of investing in new refineries, adopting a cost optimisation initiative, building an environment that promotes competition and creates a sustainable petroleum sector.

“These actions would lead to increased employment, reduced poverty and reduced social inequity. We must take advantage of the opportunities brought by the African Continental Free Trade Area agreement (AfCFTA) and fully benefit from our barrels of crude, getting the maximum value it can bring Nigeria,” he noted.

Oyebanji, however, harped on the need for participants in the fuel supply chain, both operators and regulators demonstrate cost optimisation in every practical and public way possible.

He canvassed for the replication of the current measure to cut cost of operation in the nation’s oil and gas industry to the entire spectrum of the economy especially governance.

He added: “In line with the recently launched Nigerian Upstream Cost Optimisation Programme (NUCOP), efforts must be made to reduce costs of production, administration and governance throughout the petroleum value chain in the Nigerian petroleum sector, (particularly) the downstream, in order to promote efficiency and competitiveness within the industry and ensure value creation for all consumers.

“However, beyond this initiative being limited to the petroleum industry, we believe it is a notion that should be applied to the Nigerian landscape, particularly in the area of governance.

“As promised by the government, a visible and measured reduction in the cost of governance throughout the polity would bring about savings which can be directed toward improving the livelihood of the average Nigerian.

“This cost optimisation initiative would demonstrate to Nigerians the good faith of the decision makers in both the public and private sectors.”

Source: ThisDayLive

The Petroleum Products Marketing Company, a subsidiary of the Nigerian National Petroleum Corporation, has increased the ex-depot price of Premium Motor Spirit, also known as petrol, to N155.17 per litre from N147.67 per litre.

The PPMC disclosed this in an internal memo with reference number PPMC/C/MK/003, dated November 11, 2020, and signed by Tijjani Ali.

The memo, a copy of which was seen by our correspondent, said the new ex-depot price would take effect from Friday.

The ex-depot price is the price at which the product is sold by the PPMC to marketers at the depots.

In its PMS price proposal for November, the PPMC put the landing cost of petrol at N128.89 per litre, up from N119.77 per litre in September/October.

It said the estimated minimum pump price of the product would increase to N161.36 per litre from N153.86 per litre.

The National Operation Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, in a telephone interview with our correspondent, said the over N7 increase in ex-depot price would translate into an increase in pump prices.

He said, “The implication of the increase in the ex-depot price is that there is going to be an increase in the pump price. We are expecting the pump price to range from N168 to N170 per litre.

“Crude oil price is going up,” he said, noting that the Federal Government has fully deregulated petrol prices.

Following the deregulation of petrol prices in September, marketers across the country adjusted their pump prices to between N158 and N162 per litre to reflect the increase in global oil prices.

Petrol price band had also risen from N121.50–N123.50 per litre in June to N140.80-N143.80 in July and N148-N150 in August.

The Minister of State for Petroleum Resources, Timipre Sylva, said in September that the government had stepped back in fixing the price of petrol, adding that market forces and crude oil price would continue to determine the cost of the product.

Source: Punch

Barely 24 hours after the members of the Petroleum and Natural Gas Senior Staff Association (PENGASSAN) and the National Union of Petroleum and Natural Gas workers (NUPENG) declared a nationwide strike, the Nigerian National Petroleum Corporation (NNPC) yesterday dismissed mounting insinuation of possible scarcity of petroleum products as a result of the strike.

Group general manager, Group Public Affairs Division of the Corporation, Dr Kennie Obateru, quoted Mallam Mele Kyari as saying, in a release, that the industrial action embarked upon by PENGASSAN would not lead to scarcity of petroleum products as all fuel stations and petrol depots in the country have enough stock of products to service consumers and are open for business.

While expressing hope that the industrial dispute would be settled amicably, Kyari assured that the Corporation has thus far emplaced a stock of over 2.9 billion litres of petrol to guarantee seamless movement of people, goods and services across the country in the forthcoming Christmas season and beyond.

The NNPC GMD reiterated that the Corporation is determined to make the 2020 end-of-year festivities a zero fuel queue period just like the preceding year, noting that critical stockholders in the petroleum products supply and distribution chain such as tanker drivers, depot owners and road transport owners have been mobilized to ensure hitch-free season.

Source: Leadership

The Nigeria Labour Congress has vowed to proceed with its planned strike and protest with effect from September 28 following the failure of the Federal Government to reverse the hike in electricity tariff and fuel price.

Rising from its National Executive Council meeting in Abuja a few minutes ago, the NLC President, Ayuba Wabba, said the proposed action by the organised labour would proceed from next week.

He stated that the decision was unanimously taken by the chairmen of the 36 states and FCT chapters of the NLC.

Since the hike in petrol price, the federal government has tried to justified the increment, insisting the price remains one of the cheapest in Africa.

Lai Mohammed, the Minister of Information and Culture, joined at a briefing by the Minister of Power, Sale Mamman; and the Minister of State for Petroleum Resources, Timipre Sylva said, “In spite of the recent increase in the price of fuel to N162 per litre, petrol prices in Nigeria remain the lowest in the West/Central African sub-regions.

“Below is a comparative analysis of petrol prices in the sub-regions (naira equivalent per litre): Nigeria -N162 per litre; Ghana -N332 per litre; Benin -N359 per litre; Togo – N300 per litre; Niger – N346 per litre; Chad -N366 per litre; Cameroon -N449 per litre; Burkina Faso -N433 per litre; Mali -N476 per litre; Liberia – N257 per litre; Sierra Leone -N281 per litre; Guinea -N363 per litre; and Senegal – N549 per litre.

“Outside the sub-region, petrol sells for N211 per litre in Egypt and N168 per litre in Saudi Arabia.

“You can now see that even with the removal of subsidy, fuel price in Nigeria remains among the cheapest in Africa.”

President Buhari also justified the increase as he hinged it on the effects of the COVID-19 pandemic.

He said, “The COVID-19 pandemic has led to a severe downturn in the funds available to finance our budget and has severely hampered our capacity.

“One of the steps we took at the beginning of the crisis in March when oil prices collapsed at the height of the global lockdown was the deregulation of the price of Premium Motor Spirit such that the benefit of lower prices at that time was passed to consumers.

“This was welcome by all and sundry. The effect of deregulation though is that PMS prices will change with changes in global oil prices.

“This means quite regrettably that as oil prices recover we would see some increases in PMS prices. This is what has happened now. When global prices rose, it meant that the price of petrol locally will also go up.

“There are several negative consequences if government should even attempt to go back to the   business of fixing or subsidising PMS prices.

“First of all, it would mean a return to the costly subsidy regime. Today we have 60 per cent less revenues, we just cannot afford the cost.

“The second danger is the potential return of fuel queues – which has, thankfully, become a thing of the past under this administration.

“We do not have the resources at this point to continue in this way and it will be grossly irresponsible to borrrow to subsidise a generation and distribution which are both privatised.

“But we also have a duty to ensure that the large majority of those who cannot afford to pay cost reflective tariffs are protected from increases.

“NERC, the industry regulator, therefore approved that tariff adjustments had to be made but only on the basis of guaranteed improvement in service.”

The Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari, has said there is a need for Nigeria to act fast and address the loss of foreign investors’ confidence in the country’s oil and gas industry.

Kyari said the absence of a stable fiscal environment was inhibiting the growth of the industry, especially the upstream sector.

He spoke while playing host to members of the House of Representatives Committee on Petroleum Resources (Upstream), who were on an oversight visit to the corporation recently, according to a statement on Tuesday.

He said “international investors were losing confidence in the nation’s oil and gas industry” and urged the lawmakers to act fast and arrest the situation.

“We need to act quickly to move from this unstable situation to a very stable one and the only way is for us to get the Petroleum Industry Bill to work so that countries and investors can work with us,” the NNPC boss said.

According to him, foreign capital is needed in the upstream sector and the only way to attract it is to have stable laws and a friendly business environment that can guarantee cost recovery and a decent return on investment for investors.

Kyari noted that the uncertainty in the sector created by the long delay in the passage of the PIB had led to a number of divestments from the country in the recent past.

He said the drive by the management of the NNPC to entrench the culture of transparency in the corporation had improved its business fortunes and creditworthiness “as lenders are now willing to grant credit to it.”

source: Punch