Business

Fresh Fuel Price Hike Looms As Landing Cost Rises By 37.4%

Published

9 months ago

August 14, 2023

Editor

There are strong indications that pump price of petrol is expected to record another round of increases, the third within 10 weeks as oil marketers hint that the landing cost of petrol has risen month-on-month, MoM, by 37.4 per cent to N632.17 per litre in July 2023, from N460 per litre in June 2023.

The landing cost excludes other additional costs which includes deport related charges, transportation logistics and marketers’ margin, which would combine to bring delivery at filling stations at nearly N700/litre.

Sources around oil marketers told Vanguard that the landing cost for August is expected to rise further as the factors that propelled the rise in July figures have worsened as at last week.

Giving further insight, they said foreign exchange has been a major concern where scarcity has persisted while exchange rate has also continued to deteriorate.

As at last weekend Naira had depreciated by about 6.5 percent in the official market and 25 percent in the parallel market since the last pump price raise.

The marketers also noted that cost of fuel import is rising in response to the recent rises in price of crude oil in the international market.

A transactional analysis of a major operator, sighted by Financial Vanguard last weekend showed that marketers were paying N604.14 per litre as total direct cost.

A breakdown shows product cost per liter at N578.46, freight (Lome-Lagos) at N10.37, port charges at N7.37, NMDPRA levy of N4.47, storage cost at N2.58, Marine insurance cost at N0.47, fendering cost at N0.36 and ”others” at N0.05 as well as a finance cost amounting to N28.04.

Specifically, the transactional analysis put the landing cost of 28,000 metric tons of imported petrol at over $25 million, including total product cost, total direct cost, total finance cost, capable of generating more than N22 billion as sales revenue, indicating a loss of over N1.6 billion.

As a result of this development, the marketers said it would be unprofitable to import at current pump price, while the government has not guaranteed a free float of pump prices.

Consequently, the Nigerian National Petroleum Company Limited, NNPCL, has remained the only importer aside the minor private importation recorded last month.

The situation appears worsening as Nigeria’s crude oil output is now declining threatening the capacity to import refined products.

In its August 2023 Monthly Oil Market Report, MOMR, obtained by Financial Vanguard, the Organisation of Petroleum Exporting Countries, OPEC, noted the dwindling output of many nations, adding that Nigeria’s oil production dropped on a year-on-year, YoY, basis by 6.5 per cent to 1.26 million barrels per day, bpd in July 2023, from 1.2 million bpd recorded in the corresponding period of 2022.

It also noted that on a month-on-month, MoM basis, the nation’s output dropped by 3.0 per cent to 1.26 million bpd in July 2023, from 1.3 million bpd in June 2023.

Experts give insight

Commenting on the oil price situation in a telephone interview with Vanguard, weekend, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria, IPMAN, Mike Osatuyi, said: “It is good because the high crude oil prices mean additional revenue to the federal government. The revenue would likely be used to fund projects and programmes because the government is no more involved in the payment of fuel subsidy.”

He, however, added: “But Nigerians will have to pay more for fuel, which prices have been deregulated. The prices are currently high, but we are optimistic that the prices will fall as a result of competition in future.”

Market volatility discourages importation, investment – Marketer

The Managing Director of a major operator, who pleaded anonymity, said the instability and volatility being experienced now in the downstream sector have discouraged, not only importation, but also massive investment expected of a deregulated market.

He urged President Bola Tinubu to intervene in the management of the nation’s foreign exchange in order to rescue deregulation and the nation’s downstream sector from confusion, stagnation and eventual collapse.

He stated: “We havea point where President Bola Tinubu’s intervention is inevitable. Even if we have the resources to import, we cannot be very sure at what price the product would be sold. So, it is better to hold on and see the way things would unfold in the coming months.”

Crude oil prices, Naira depreciation will continue to impact market — Argus

However, checks by Vanguard showed that the situation could worsen, putting pressure on local and international dealers to adjust prices as Argus, a United Kingdom-based market intelligence, stated: “Nigerian crude values have seen an upward trend over the past few weeks, which could be attributed to steady demand from Europe.”

In her email response to Vanguard inquiries, the Business Development Manager, West Africa, Funmi Bashorun, stated: “Indeed, high crude prices and continuous depreciation of the Naira pose as deterrents to the effectiveness of the deregulation and active participation by more marketers.

“However, as long as Nigeria still has to import gasoline, European oil traders will still look to cover that supply. The volumes, of course, may be less to Nigeria and more direct to other parts of West Africa because of less smuggling, but the prices will still be high.

“We at Argus encourage, as we have been, that importers look more into the pricing terms from their suppliers. For transparency in the supply chain, fairness and more; the pricing benchmark for gasoline should be Argus’ Eurobob.”
VANGUARD

Business

Naira Slumps, Exchanges At Over N1,500 Against Dollar

Published

2 days ago

May 13, 2024

Editor

The naira continued its depreciation against the US dollar in the foreign exchange market.

Data from the parallel market section and FMDQ showed further depreciation against the dollar on Monday.

At the parallel market, a Bureau De Change operator in Wuse Zone 4, Mistila Dayyabu, told DAILY POST that the naira was sold as high as N1,517 per dollar on Monday before settling at N1,500 per dollar.

“On Monday morning, the dollar was sold at N1,517 per dollar. However, on hearing the information about the coming of the Economic and Financial Crimes Commission operatives, we started selling at N1,500 this evening, ” he said.

The figure increased from the N1, 450 per dollar it traded at the weekend.

Similarly, at the official market, FMDQ data showed that they dipped to N1478.11 per dollar on Monday from N1466.31 last Friday.

This represents an N11.8 drop from the N1466.31 recorded last Friday.

Earlier, the Central Bank of Nigeria Governor, Olayemi Cardoso, said the apex bank’s Monetary Policy Committee will do everything to bring down soaring Nigeria’s inflation, which stood at 33.22 per cent in March 2024.

Business

CAC Opens Centre For Registration Of PoS Operators

Published

7 days ago

May 9, 2024

Editor

The Corporate Affairs Commission has inaugurated a centre for bulk registration of Point of Sale operators in its database.

The CAC Registrar-General, Hussaini Magaji, said this while inaugurating the centre stationed at its Federal Capital Territory Office in Abuja on Wednesday.

According to Magaji, the importance of registering the PoS operators in the commission’s database cannot be over emphasised.

He said the centre was well equipped with all the necessary facilities to operate 24 hours a day and ensure the commission’s achievement of its purpose.

“What we did was accommodate the request from the Fintechs.

“We have allowed them to integrate with the Corporate Affairs Commission; they have developed their structure, and we gave them access.

“Once they supply the necessary details for registration on their platform, the certificate is generally generated and transmitted directly to their platform without them having to contact anyone.

“We have done this to ensure that everyone gets it easy without hitches, but if they choose to apply manually, we have a secretariat open for them to do so,” he stated.

Recall that the Federal Government through the CAC on Tuesday issued a two-month registration deadline to Point of Sales companies, to register their agents, merchants, and individuals with the commission in line with legal requirements and the directives of the Central Bank of Nigeria.

Meanwhile, at the event, the registrar-general reiterated that the centre would be opened to all operators in the fintech industry who voluntarily submitted their agents and merchants for regularisation with the CAC.

Magaji said that the registration was in line with President Bola Tinubu’s desire to ensure financial inclusion for the youth and strengthen the fight against fraud, finance and other crimes in the country.

He further expressed his resolve to ensure compliance with the provisions of Section 863 (1) of the Companies and Allied Matters, CAMA 2020, and the CBN guidelines for Agent Banking, 2013.

On security, the CAC boss said that if a crime were committed using the PoS, the government would easily trace the perpetrators to the CAC data platform if such machines were registered.

“If an incident happens and they report it to CAC, if we do not have the operator’s details, we cannot respond, and that is the essence of this registration.

“The registration ensures that every detail of the person is provided, including NIN, passport photograph and all other useful documents.

“And it is an opportunity for more people to be captured into the formal sector,” he said.

The News Agency of Nigeria reports that the Special Adviser to the President on ICT Development and Innovation, Tokoni Peter attended the event.

The event was attended by Dr Salihu Dasuki, the Special Adviser to the President on ICT Policy Office, the PoS operators, and other stakeholders.

(NAN)

Business

FULL LIST: CBN Publishes List Of Licensed Deposit Money Banks

Published

1 week ago

May 8, 2024

Editor

The Central Bank of Nigeria has released a comprehensive list of licensed Deposit Money Banks operating within the country.

The list, which was made public on the CBN’s official website on Tuesday, provides insights into the banking landscape in Nigeria.

Banks with international authorisation include Access Bank Limited, Fidelity Bank Plc, First City Monument Bank Limited, First Bank Nigeria Limited, Guaranty Trust Bank Limited, United Bank of Africa Plc, and Zenith Bank Plc.

Commercial banks with national authorisation include Citibank Nigeria Limited, Ecobank Nigeria Limited, Heritage Bank Plc, Globus Bank Limited, Keystone Bank Limited, Polaris Bank Limited, Stanbic IBTC Bank Limited, Standard Chartered Bank Limited, Sterling Bank Limited, Titan Trust Bank Limited, Union Bank of Nigeria Plc, Unity Bank Plc, Wema Bank Plc, Premium Trust Bank Limited and Optimus Bank Limited.

Commercial banks with regional licenses are Providus Bank Limited, Parallex Bank Limited, Suntrust Bank Nigeria Limited, and Signature Bank Limited.

Players in the non-interest banking sector with national authorisation include Jaiz Bank Plc, Taj Bank Limited, Lotus Bank Limited, and Alternative Bank Limited.

In the merchant banking category, the apex banks listed, are Coronation Merchant Bank Limited, FBN Merchant Bank Limited, FSDH Merchant Bank Limited, Greenwich Merchant Bank Limited, Nova Merchant Bank Limited, and Rand Merchant Bank Limited.

The financial holding companies listed were Access Holdings Plc, FBN Holdings Plc, FCMB Group Plc, FSDH Holding Company Limited, Guaranty Trust Holding Company Plc, Stanbic IBTC Holdings Plc, and Sterling Financial Holdings Limited.

The Mauritius Commercial Bank Representative Office (Nigeria) Limited was listed as the sole representative office.