OIL PRICE NG

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.