Subsidy removal: Fuel price hike imminent as crude oil price inches towards $100 per barrel – Newstrends
Connect with us

Business

Subsidy removal: Fuel price hike imminent as crude oil price inches towards $100 per barrel

Published

on

Subsidy removal: Fuel price hike imminent as crude oil price inches towards $100 per barrel

In the last three months since President Bola Tinubu announced the withdrawal of petroleum subsidy, Nigerians are still trying to grapple with the over 400 per cent increment while they continue to wait for the promised palliatives from the government.

But the increase in the price of crude oil in the international market could further increase the price of petroleum at the filling stations despite the promise by President Tinubu that PMS price will not increase further.

The crude oil price in the international market has risen to $94 per barrel, the highest in the past 10 months. Market observers believe that the price will cross the $100 mark as demand increases during winter.

In the last three months since President Bola Tinubu announced the withdrawal of petroleum subsidy, Nigerians are still trying to grapple with the over 400 per cent increment while they continue to wait for the promised palliatives from the government.

But the increase in the price of crude oil in the international market could further increase the price of petroleum at the filling stations despite the promise by President Tinubu that PMS price will not increase further.

The crude oil price in the international market has risen to $94 per barrel, the highest in the past 10 months. Market observers believe that the price will cross the $100 mark as demand increases during winter.

READ ALSO:

In the past, this increment would have generated excitement because it would mean more revenue for the Nigerian government; however, the increment in crude oil price means Nigerians may have to pay more for fuel.

Last month, President Tinubu had promised that price would be maintained by “addressing the inefficiencies within the midstream and downstream petroleum subsectors to maintain prices where they are without having to resort to a reversal of the administration’s policy in the petroleum industry.”

On Friday, the Group Chief Executive Officer of NNPC Limited, Mele Kyari had told some members of the House of Representatives that the NNPC Retail is moving to acquire significant market shares in the downstream sector so as to have control of the downstream market.

It would be recalled that NNPC Retail had in December acquired the retail outlets of Oando Limited.

The deal according to Kyari means that the NNPC Retail now has 30 per cent of the market and is able to regulate prices through the market share. He explained that other petroleum marketers would be forced to maintain prices because NNPC Retail won’t increase prices.

“Some weeks ago in Lagos, There was a small queue because one company increased their price by N7. As simple as this, everybody rushed to our filling stations and a queue developed. This is the security that the PIA guarantees.

“That Nigerians will have choices and they will not be exploited. We will be the market balancer. We will create stability in the market and Nigerians will not be exploited,” he said.

READ ALSO:

However, Nigerians are still concerned about the increment despite the assurance by the President and the oil chief, particularly with the deregulation of the sector.

An economist, Dr Babatunde Adeniran says an increment may be inevitable considering the factor of demand and supply which is playing out in the international market.

“Yes. It is inevitable because they (marketers) adjust prices depending on the market realities, i.e, forces of demand and supply,” Adeniran says while responding to a question on the chance of a price hike.

Alternatives energy sources

President Tinubu had in a national broadcast in August promised to invest N100 billion in Compressed Natural Gas (CNG) buses to mitigate the impact of subsidy removal.

“The Nigerian Government has put aside N100 billion to purchase 3,000 twenty-seater buses powered by Compressed Natural Gas for deployment in all the states in the next nine months,” President Buhari said.

Adeniran urged the government to provide assistance to the masses by subsidizing the CNG kits.

“One of the means to mitigate the effect is to source for an alternative source of energy. One such alternative is the CNG. It remains the best source since it is relatively cheaper and cleaner.

“But to assist, the government can subsidize the CNG kit. If the government is able to achieve that, more people will embrace this.

“Nigeria has the capacity to meet the demand; we currently flare a lot of gas. Instead of flaring the gas, we can channel it into CNG which would be more productive,” he said.

Subsidy removal: Fuel price hike imminent as crude oil price inches towards $100 per barrel

Business

Nigeria’s foreign reserves in marginal increase, now $40.88bn 

Published

on

Nigeria’s foreign reserves in marginal increase, now $40.88bn

 

Nigeria’s foreign reserves rose to $40.88 billion as of November 21, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said.

Cardoso disclosed this on Tuesday at a press conference after the Monetary Policy Committee’s 298th meeting in Abuja.

He said the external reserves grew from $40.06 billion at the end of October to $40.88 billion in November.

The amount represents an increase of $82 million or 2.05 per cent in 21 days.

“The external reserves rose marginally to 40.88 billion as of 21 November 2024, from 40.06 billion at the end of October 2024, available to finance 17 months of imports,” he said.

However, from the apex bank’s website, the increase in Nigeria’s foreign reserves showed $40.27 billion on November 22.

Cardoso also said, “The process of getting us where we are in terms of reserves has been a long one”.

“It is a clear indication that the policies we have put in place are certainly yielding fruits,” he added.

“However, and it’s very important to make a distinction here and to reiterate the fact that reserves are there for a multiplicity of different purposes, not least of which is to create buffers in the event of unanticipated shocks.

“So they are not there to simply whittle away. They are there to be used to more or less defend yourself where that becomes necessary

“And when we talk about shocks that are not anticipated, I think we can see how the global economies are.”

Cardoso also said the bank would continue to intensify efforts to stabilise the currency and prices.

The CBN governor said, “The currency has been stable compared to what it was in June”.

But he said for the value of the country’s currency to be stable, there must be increased exports and diversification of the economy.

Cardoso said diaspora remittance had increased due to policies put in place.

He commended those in the diaspora for helping the country accomplish over $600 million in remittances.

Continue Reading

Business

Naira rises to N1,755/$ in parallel market

Published

on

Naira rises to N1,755/$ in parallel market

The Naira yesterday appreciated to N1,755 per dollar in the parallel market from N1,770 per dollar on Monday.

Similarly, the Naira appreciated to N1,659.44 per dollar in the Nigerian Autonomous Foreign Exchange Market, NAFEM.

Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N1,659.44 per dollar from N1,675.62 per dollar on Monday, indicating N16.18 appreciation for the naira. The volume of dollars traded (turnover) increased by 219.5 percent to $425.98 million from $108.79 million traded on Monday.

READ ALSO:

Consequently, the margin between the parallel market and NAFEM rate narrowed to N95.56 per dollar from N117.38 per dollar on Monday.

 

Naira rises to N1,755/$ in parallel market

Continue Reading

Business

PH refinery to blend 1.4-million litre petrol daily – NNPC

Published

on

PH refinery to blend 1.4-million litre petrol daily – NNPC

 

Rehabilitated old Port Harcourt refinery is currently operating at 70 per cent of its installed capacity, the Nigerian National Petroleum Company Limited has said.

The Port Harcourt Refining Company (PHRC) operates two refineries: the old refinery with a capacity of 60,000 barrels per stream day (bpsd) and a new refinery with an installed capacity of 150,000 bpsd.

The NNPCL in a statement on Tuesday, said it planned to increase the operation to 90 per cent of the refinery’s capacity.

“The Board and Management of the Nigerian National Petroleum Company Limited (NNPC Ltd) express heartfelt appreciation to Nigerians for their support and excitement over the safe and successful restart of the 60,000 barrels-per-day Old Port Harcourt Refinery,” the statement reads.

“This achievement marks a significant step forward after years of operational challenges and underperformance.

“We are, however, aware of unfounded claims by certain individuals suggesting that the refinery is not producing products. For clarity, the Old Port Harcourt Refinery is currently operating at 70% of its installed capacity, with plans to ramp up to 90%.”

According to NNPC, the refinery has commenced production of daily outputs of straight-run petrol (naphtha), which is blended into 1.4 million litres of petrol.

The national oil company said the refinery has also started producing 900,000 litres of kerosene per day and 1.5 million litres per day of diesel.

The NNPC said 2.1 million litres daily volume of low-pour fuel oil (LPFO) would also be produced at the refinery, adding that additional volumes of liquefied petroleum gas (LPG) will be refined at the plant.

“It is worth noting that the refinery incorporates crack C5, a blending component from our sister company, Indorama Petrochemicals (formerly Eleme Petrochemicals), to produce gasoline that meets required specifications,” NNPC said.

“Blending is a standard practice in refineries globally, as no single unit can produce gasoline that fully complies with any country’s standards without such processes.”

Additionally, the NNPC said it has made substantial progress on the new Port Harcourt refinery, “which will begin operations soon without prior announcements”.

“We urge Nigerians to focus on the remarkable achievements being realized under the able and progressive leadership of President Bola Tinubu and to support efforts aimed at delivering more dividends to the nation,” the energy firm said.

According to the statement, malicious attacks on “clear progress” only undermine the “significant strides made by NNPC Ltd and the country”.

Continue Reading

Trending