Business

Marketers Eye Fresh Fuel Price Hike As Crude Hits $94

Published

2 years ago

September 18, 2023

The rise in the cost of crude oil, coupled with the depreciation of the naira against the United States dollar, might lead to a hike in the pump price of Premium Motor Spirit, popularly called petrol, oil marketers stated on Sunday.

It was also gathered that the sharp rise in crude oil price to about $94/barrel and the crisis around forex, had warranted a gradual increase in the amount being quietly spent as subsidy on petrol by the Federal Government.

Dealers in the downstream oil sector explained that the cost of crude oil and the exchange rate of the dollar accounted for over 80 per cent of the cost of PMS.

Brent crude, the global benchmark for oil, rose to $94/barrel on Sunday, the highest figure in 2023. Oil had started the year at about $82/barrel, dipped to $70/barrel in June, but traded above $92/barrel in the past week.

Also, The PUNCH reported on Thursday that the naira weakened to N950/dollar as forex scarcity worsened.

The report stated that the naira fell further against the dollar the preceding day (Wednesday), after closing at 950/$ at the parallel market.

Bureau de Change operators had told The PUNCH that the naira, which earlier closed at 930/$ at the close of operations on Tuesday, was bought and sold at 935/$ and 950/$ on Wednesday.

Although the Federal Government and its Nigerian National Petroleum Company Limited had insisted that subsidy on petrol had ended, following the deregulation of the downstream oil sector, operators insisted on Sunday that the government was implementing quasi-subsidy.

They explained that with the latest rise in crude oil price, the cost of petrol was meant to increase, stressing that if the government insists on leaving the commodity at N617/litre, then subsidy on PMS had been returned quietly.

The marketers explained that in July when the cost of petrol was raised to N617/litre, crude oil traded around $82/barrel, while the the exchange rate was not as high as N950/$ at the parallel market.

The Nigerian Association of Road Transport Owners corroborated the concerns of marketers, as it stated that the price cap on petrol had made it tough for marketers to comply with the demands of NARTO with respect to increasing the cost of transportation for petrol.

“The Group Chief Executive Officer of NNPC, in one of his statements, had pointed out that as long as the dollar continues to rise, Nigerians should not expect petroleum products prices to be pegged. The cost of crude oil is also on the rise and it impacts on petrol price, because PMS is derived from crude.

“So in this price deregulation regime, once the dollar increases, automatically it means that the cost of importing petroleum products will also increase. And the cost of every other related service will rise,” the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, stated.

He added, “So the fuel we are buying today at N617 or N596 depending on where you buy it and based on the nearness to depots, is actually below what the price should really be, going by the rise in dollar and crude oil price.”

Ukadike stated that though the rise in crude oil price would increase Nigeria’s foreign exchange earnings, the forex was being used to import refined products.

“I said earlier that what we are experiencing now is quasi-deregulation. The rise in crude oil price has both positive and negative effects on Nigeria. It is positive because it increases our generation of dollars when we sell the crude.

“But it is negative in the sense that we still use that dollar that we have got to import the finished products of crude. That is the problem. For if Nigeria is refining products, then there will be a windfall, but since we import with the dollar that we make, then it makes no sense.”

On whether the rise in oil prices would warrant further hike in the cost of PMS and other finished products, thereby increasing subsidy on petrol particularly, Ukadike replied, “Yes, of course.

“The gap is becoming too much. Also, the exchange rate gap between the official and parallel markets is widening. And these gaps have to be filled by the government through quasi-subsidy on petrol.

“You also know that most of the investors who tried to import products when it was announced that the subsidy on petrol had been removed, are now finding it very difficult to do so.

“This is because after buying the dollar in the parallel market, they cannot recoup what they have invested. So the government must be transparent with this subsidy removal thing. It should apply it to the fullest, so that competition can set it.”

On his part, the President, Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, said though the cost of crude had been rising lately, the NNPCL should be able to manage it for the benefit of Nigerians, with respect to petroleum products prices.

“Crude oil is selling at a higher price and that price should impact positively, because the major importer of petroleum products is the NNPC and they do that on a swap basis, unless they are telling us that the swap is not efficient.

“For if it is efficient, they should have more money for the size of crude oil they sell, which should impact on the price they pass on to Nigerians. Yes, today it is a commercial company, but it is still owned by Nigerians and is a sovereign company.

“And the fact that Nigerians must benefit from their natural endowment by God should be reflected in the pricing of products by NNPC. That is all I’ll say about this issue,” he stated.

Earlier, the National Secretary, IPMAN, Chief John Kekeocha, had asked the Federal Government to come out clean with respect to fuel subsidy, instead of mandating oil marketers not to dispense the product above a stipulated band.

In August, the Special Adviser to the President on Media and Publicity, Ajuri Ngelale, had told State House correspondents that President Bola Tinubu had instructed that the cost of petrol should not increase.

“Mr. President, wishes to assure Nigerians following the announcement by the NNPC limited just yesterday (Monday) that there will be no increase in the pump price of PMS anywhere in the country. We repeat, the President affirms that there will be no increase in the pump price of PMS.”

NNPCL had also in August stated that it was not raising petrol price.

“Dear esteemed customers, we at NNPC Retail value your patronage, and we do not have the intention to increase our PMS pump prices as widely speculated. Please buy the best quality products at the most affordable prices at our NNPC Retail stations nationwide,” the company had stated.

NNPC Retail is the downstream subsidiary of NNPCL that retails refined petroleum products for the group.

Kekeocha had said that the decision of the Federal Government to put a cap on petrol price meant that subsidy on petrol had been reinstated.

He said, “The government is not being very transparent with this issue. When you say you have removed fuel subsidy, you don’t come again and moderate prices. Is like speaking with the two sides of the mouth.

“Removal of subsidy means you have removed your hands and the prices have to follow demand and supply. So if the NNPC says it is getting forex (foreign exchange) to import products and reduce prices for marketers, are they going to do the same for other importers? Remember the government gave import licenses to about seven marketers?

“Are they still going to moderate prices for those people when they bring in the products? No! You don’t blow hot and cold at the same time. There is no way they can bring in products and reduce the price and peg it for marketers to sell at a certain level, it means they are indirectly bringing back subsidy.

“If they want to bring back subsidy, let them say it openly, that ‘we are going to come back to subsidy because of the pains the country generally is going through.’ This is because the initial things they are supposed to do they did not do it. We have always been clamouring, let the refineries work.”

NARTO raises concern

The National President, Nigerian Association of Road Transport Owners, Yusuf Othman, said despite the high cost of operations in the downstream arm of the oil sector, the government had stopped increasing the pump price of PMS.

He noted that since marketers could not raise their pump prices for petrol, it had been impossible for them to increase their costs for the transportation of PMS, stressing that this had made the cost of doing the business unbearable for transporters.

“NARTO is complaining that the high cost of diesel is unbearable. Even if you discuss it with the oil marketers, all they tell you is that government has fixed the pump price (of petrol) at N617/litre, that since they cannot increase pump price, they cannot increase the fare for us. So we are in trouble,” Othman stated.

He said the government should look into the pump price of PMS in order to enable marketers consider raising the transportation price for transporters.

“This is because without looking at the pump price, marketers cannot increase transportation price. And if they do not do that we have no choice than to continue to park. And if we continue to park it will create unwanted disruption of supply and we don’t want that,” Othman stated.
PUNCH

Up Next

NNPCL Appoints 3 Executive Vice Presidents

Don't Miss

Relief As Cement Price Set To Crash From N5,500 To N3,500

Comments

Business

Confusion Over Euro-Africa CCI’s $250m Investment In Edo

Published

3 days ago

September 29, 2025

Editor

The $250m investment deal Governor Monday Okpebholo claimed to have secured during his recent trip to Scotland is generating ripples over capacity of the European African Chamber of Commerce and Industry (EACCI) to make such a huge investment.

The EACCI, headed by a Drector General, Dr. Kingsley Obasohan, is not known to have made any prior investment in Edo State or any part of the country.

Obasohan, who attended the Edo State Global Investment Summit virtually, announced the $250m investment.

He said the investment would be made for a period of three years.

An online search was launched to unravel the EACCI as well as the man Obasohan.

A number on the site was answered by a lady who claimed not to understand English language.

Several foreign partners were listed on the site as board members and advisory council.

Some closed associates of Obasohan said he would have to get clearance from the Board members before talking to journalists on the issue.

Spokesman for the Edo Peoples Democratic Party, Daniel Noah Osa-Ogbegi, said the party would hold Governor Okpebholo accountable to Edo people and demanded clarity on the $250m investment from Glasgow.

Osa-Ogbegi said the proposed investment has become a source of embarrassment to Edo people because of unfolding information about EACCI.

He said the party would shine light on fiscal management practices that appeared to ignore transparency and responsibility.

Secretary to the State Government (SSG), Umar Musa Ikhilo, had earlier said those that attended the Glasgow summit were interested in keying into the SHINE agenda of Governor Okpebholo.

“One of the chambers of commerce that attended, the European African Chamber of Commerce and Industry signed an MoU with the Edo State Government to invest a sum of $250 million over the next three to five years.

“Last year, diaspora remittances were the second-highest source of foreign income in Nigeria after crude oil, over $20 billion, but only 2% of that went into investment. We are creating a vehicle to help convert more of that into direct investments.”

He added that a delegation from Scotland was expected to visit Edo State in the coming months to explore specific investment projects as a follow-up to the summit.

Business

Dangote Hits Out At PENGASSAN, Says Union ‘Serial Saboteurs, Serving Oligarchs’

Published

4 days ago

September 28, 2025

Editor

The management of Dangote Petroleum Refinery has berated the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), accusing the union of decades-long sabotage of Nigeria’s oil and gas sector and serving the interests of its leaders rather than ordinary Nigerians.

In a statement issued at the weekend, the refinery described PENGASSAN’s latest directive to cut crude oil and gas supplies to the facility as another act of economic sabotage designed to inflict untold hardship on Nigerians.

“Indeed, over time, the Association has consistently proved itself as serving interests other than those of Nigerians and Nigerian workers,” the statement declared.

Dangote recalled that in 2007, when the Federal Government sold its moribund Port Harcourt and Kaduna refineries to Blue Star Consortium, led by the Dangote Group, for $750 million, it was PENGASSAN and its ally, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), that sabotaged the deal. “It is now obvious to everyone that the FGN’s decision at the time was the right one and that PENGASSAN and NUPENG ignominiously wrote their names on the wrong pages of history,” the company said.

The refinery also faulted the union’s role in the much-publicised rehabilitation of the Port Harcourt Refinery, describing it as a “ruse” which PENGASSAN “knowingly celebrated despite being a scam on Nigerians.” The statement further accused the union of opposing amendments to the Petroleum Industry Act (PIA) that would have freed up federal liquidity and attracted private-sector funding into Nigeria’s upstream oil ventures.

Beyond policy obstruction, Dangote Refinery accused the association of mismanaging billions of naira in annual check-off dues to allegedly bankroll the “lavish lifestyles” of its leaders, without accountability to members. By contrast, the refinery highlighted its own record of economic contributions within a short period, citing road construction, worker training, the creation of thousands of Nigerian jobs, and a compensation structure that “outdistances the best in the Nigerian oil and gas industry.”

“The Dangote Group is the highest employer of labor in Nigeria and the highest contributor to the tax revenues of Nigeria and its sub-nationals. What comparable social responsibility has PENGASSAN, with its billions of Naira in annual check-off dues and subscriptions, lived up to?” the statement queried, challenging the union to publish its audited accounts for the past ten years. “Can it publish publicly its account for the last 10 years and list out its corporate responsibility activities within that timeframe?”

The refinery insisted that PENGASSAN’s recent directive to withdraw services and cut off essential fuel supplies, including but not limited to petrol, diesel, kerosene, cooking gas and aviation fuel was reckless, lawless and dangerous. It said the order is not about protecting Nigerian workers, but it is about a cabal of oligarchs weaponising hardship against over 230 million Nigerians.

“In the process, it (PENGASSAN) cares little if at all about the unbearable hardship and terror it would thereby inflict on all Nigerians, including but not limited to the provision of essential services in our hospitals and medical facilities, schools (nursery and right up to tertiary and research institutions), emergency services, communications facilities, transportation systems, etc,” it said.

Dangote Refinery called on the Federal Government and security agencies to step in immediately to protect the facility and the nation’s energy security, stressing that the union must not be allowed to “bully Nigerians into chaos and economic sabotage.”

According to Tribune Online, the federal government has announced readiness to broker peace between Dangote Refinery and PENGASSAN, inviting both to a meeting scheduled for Monday.

Business

Fuel Scarcity Looms As PENGASSAN Stops Gas, Crude Supply To Dangote Refinery

Published

5 days ago

September 27, 2025

Editor

The industrial dispute between the Dangote Petroleum Refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria took a dramatic turn on Saturday as the union ordered seven branches to cut off crude oil and gas supplies to the $20bn facility.

In a letter dated September 26 and signed by its General Secretary, Lumumba Okugbawa, the union accused the refinery’s management of sacking its members in retaliation for exercising their constitutional right to join the union.

The union’s move marks an escalation in the standoff, with PENGASSAN accusing the refinery of anti-labour practices and the unlawful sack of its members.

In the directive issued to its branch chairmen, PENGASSAN instructed its branch chairmen in key upstream and midstream oil companies, including TotalEnergies, Chevron, Seplat, Shell Nigeria Gas, Oando, and Nigerian Gas Infrastructure Company, to immediately cut off all crude oil and gas supplies to the refinery.

The directive comes after PENGASSAN alleged that Nigerian workers were sacked by Dangote Refinery after joining the union, claiming that management also withdrew staff buses and denied entry to locals while allowing expatriates access.

The union threatened to picket the refinery if the situation was not addressed.

In a statement on Friday, the refinery clarified that only a small number of workers were affected by what it described as a reorganisation aimed at preventing acts of sabotage within the facility. It said over 3,000 Nigerians remain in employment, rejecting claims of mass layoffs.

Dangote maintained that the restructuring was necessary after what it described as recurring acts of sabotage in different units of the refinery, which posed serious risks to human lives and operations.

As a result, PENGASSAN instructed its branches in TotalEnergies, Seplat, Chevron, Oando, Shell Nigeria Gas, Renaissance, and NGIC to cut gas supply to the refinery immediately.

The union described the move as “illegitimate” and accused the refinery of spreading misinformation instead of addressing the matter through dialogue.

“As you are aware, the Management of Dangote Petroleum Refinery has disengaged our members in reaction to the exercise of their constitutional right to being unionized.

“They have gone further on a mission of misinformation and propaganda to justify this illegitimacy rather than engaging meaningfully with us to right the wrong.

“Consequent to these, you are hereby directed to cut off gas supply to NGIC effective immediately. All crude oil supply valves to the Refinery should be shut. The loading operation for vessel headed there should be halted immediately,” the directive read.

The union further mandated the NGIC Chairman to ensure strict compliance with the order and told all branch chairmen to give regular updates on the action taken.

“NGIC Chairman, ensure that gas supply to the Refinery is cut off effective immediately. All chairmen on this summons are to report promptly the progress of the directive. Kindly accept the assurances of our highest esteem. Thank you,” the statement read.

Reaffirming its solidarity, PENGASSAN ended the directive with its slogan: “Injury to one! Injury to all!”

On Thursday, the company announced it would suspend petrol sales in naira from September 28 following the exhaustion of its crude-for-naira allocations.