Business
Why Petrol Price Can’t Drop As Low As ₦300/Litre- Major Marketers
A section of oil marketers have refuted claims by reports doing the rounds, that local refining of crude oil could force the pump price of petrol, to drop as low as ₦300 per litre.
Oil marketers under the aegis of the Major Energy Marketers Association of Nigeria (MEMAN), were reacting to a report that the pump price of Premium Motor Spirit, will drop to about ₦300/litre upon the commencement of massive production by the Dangote Petroleum Refinery and other indigenous producers, operators of modular refineries.
However, they pointed out that this would be achieved when the government ensured the provision of adequate crude oil to local refiners, stressing that refineries abroad were ripping off Nigeria.
“A lot of companies today benefit from the importation of petroleum products at the expense of Nigerians,” the Publicity Secretary, the Crude Oil Refinery Owners Association of Nigeria (CORAN), Eche Idoko was quoted to have told the reporter.
He added, “If we begin to produce PMS today in large volumes, provided there is adequate crude oil supply, I can assure you that we should be able to buy PMS at N300/litre as the pump price.
“Why make Nigerians buy it at almost N700/litre when you know that if you allow refineries to work the price will come down? Is it because you want to satisfy the global refiners abroad that are making so much from us?”
However, while speaking with Channels Television on Monday, a former chairman of MEMAN and current Chief Executive Officer of 11 Plc, Tunji Oyebanji, said the price of petrol could not drop as low as ₦700 per litre.
“One barrel of crude has 159 litres. Currently, a barrel is about $80. Multiply that by ₦1,400, and you get 1400 x 80= ₦112,000 for a barrel of crude. Divide ₦112, 000 by 159, and it gives you ₦702 per litre of crude only. No refining, no transportation, no finance cost, and no distribution margins. Just ordinary crude is ₦702,” he said.
Oyebanji’s stance contradicts the CORAN’s executive insistence, that petrol price would crash when presented with wide arguments that it is not possible to have such a drop in price because crude oil, the raw material for PMS, is priced in dollars.
He said, “We were selling diesel for N1,700 to N1,800/litre, but as soon as Dangote refinery started production he brought down the price to N1,200/litre. What other proofs do you need?
“As I speak to you now there is every tendency that before December diesel prices will drop further. The only reason why diesel is not doing below N1,000/litre is because of our exchange rate.
“If the exchange rate drops, diesel will drop below the N1,000/litre price. Now the exchange rate concern is because Dangote imports crude. If he is not importing, the exchange rate may not have so much effect, though he is still buying crude in dollars (in Nigeria) anyway.”
On May 18, 2024, Africa’s richest man, Aliko Dangote, stated that following the laid-down plans of the Dangote refinery, Nigeria would no longer need to import petrol starting June this year.
Dangote had also stated that his refinery could meet West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand. He spoke at the Africa CEO Forum Annual Summit in Kigali, expressing optimism about transforming Africa’s energy landscape.
“Right now, Nigeria has no cause to import anything apart from gasoline (petrol) and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre,” the billionaire had declared.
Also, Dangote had earlier in the year crashed the pump price of diesel to N1,200/litre when the commodity was selling at between N1,700 and N1,800/litre at the time.
He further dropped the price to below N1,000/litre, but could not sustain this price due to the rise in exchange rate. The refinery eventually returned the price to the initial rate of N1,200/litre.
The Economic and Financial Crimes Commission (EFCC) has cautioned Nigerians against the excessive desire for money.
The agency issued the advice in a terse post on its X handle on Sunday.
“Love money too much, and Ponzi schemes will love you …..as their next target….be guided, the Eagle loves you all,” the post read.
This is coming amid ongoing investigation into the alleged fraud perpetrated by a digital investment platform, CryptoBank Exchange (CBEX).
CBEX had reportedly crashed on April 14, leading to the loss of billions of naira belonging to Nigerian investors.
Several videos online had shown some Nigerians raising the alarm over the loss of their funds to the scheme.
The EFCC had on Friday declared eight persons wanted over their alleged involvement in a fraudulent scheme linked to the online trading platform.
The move came on the heels of the Federal High Court in Abuja granting the EFCC’s request to arrest and detain persons found promoting the CBEX scheme.
Justice Emeka Nwite, issued the order following submissions by the counsel for the EFCC, Fadila Yusuf, seeking the court’s approval to detain the promoters pending the conclusion of investigations into the alleged offences and their possible prosecution.
The EFCC stated that during the investigation, it found that ST Technologies, while registered with the Corporate Affairs Commission, was not authorised by the Securities and Exchange Commission to conduct investment activities.
Furthermore, it said the defendants had vacated their last known addresses in Lagos and Ogun States.
The EFCC had argued that a warrant of arrest was necessary to place the defendants on a red watch list to facilitate their capture and ensure they face charges.
The commission said its investigation had also established a prima facie case of an investment scam and that granting the application was in the interest of justice.
During an interview on Channels Television’s breakfast programme, The Morning Brief, on April 16, the EFCC spokesperson, Dele Oyewale, advised Nigerians against investing in a business without considering the legal framework that regulates it.
Oyewale said, “We know that for every business concern, you declare your profit either quarterly, annually or bi-annually, but if somebody says, ‘Bring your money; I’m going to give you a return in 30 days,’ you know that is not realistic; it’s just not pragmatic.
“Or if somebody says, ‘If you bring your money, we’re going to give you a 100% return on investment,’ that is not possible”.
Nigerian carrier, Air Peace, has clarified why its Benin to Abuja flight P47171 was delayed in the air on Friday.
In a statement issued by the Head of Corporate Communications, Ejike Ndiulo, Air Peace Airline on Saturday stated that during the aircraft’s descent into Abuja, the flight encountered turbulence as a result of adverse weather conditions, including thunderstorms.
The statement further stressed that in line with global aviation safety standards, “our crew activated appropriate safety protocols and held in a holding pattern until weather conditions improved.”
Social media users complained on Saturday that the aircraft hung in the air longer than necessary before landing.
Elanza news understands that when an aircraft is held in a holding pattern, this means the plane was instructed to fly a specific course around a designated point while waiting for permission from the control tower to proceed with its planned route, approach, or landing.
This is often due to factors like traffic congestion at the given airport, weather delays, or other operational issues that could result in an incident or accident if the aircraft had landed against instructions.
In simpler terms, a holding pattern is a temporary waiting area for an aircraft in the air, allowing it to remain airborne while awaiting further instructions for landing.
The statement further stated, “We are pleased to confirm that the aircraft landed safely and the passengers disembarked normally. Air Peace is unwavering in its commitment to ensuring the highest standards of safety across all our operations.”
IMF to FG: Enhance transparency in oil sector, contain borrowing
The International Monetary Fund (IMF) has advised Nigeria to enhance transparency in the oil sector to ensure that the subsidy removal savings are transferred to the government’s budget.
Abebe Selassie, the director of the African department at the IMF, gave the advice on Friday while presenting the findings of the Regional Economic Outlook for Sub-Saharan Africa report at the IMF and World Bank spring meetings in Washington, DC, the United States.
Selassie was responding to questions on the federal government’s reforms and Nigeria’s debt profile, which currently sits at N142.3 trillion as at September 2024.
Speaking to journalists, the director said the fund has been very impressed by the reforms Nigeria has undertaken to address microeconomic imbalances in the country.
The director said the subsidy was taking “a very large” share of the limited tax revenues, which was not effectively used to help the most vulnerable people.
“So it’s been really good to see the government taking these head on, and also beginning to roll out the third component of the reforms that we’ve been advocating for, [that] government has been pursuing, which is to expand social protection to target generalised subsidies to help the most vulnerable,” he said.
“This has all been very good to see, but more can be done, particularly on the latter front: expanding social protection and also enhancing a lot more transparency in the oil sector, so that the removal of subsidies does translate into flow of revenue into government budget.
“So, there’s still a bit more work to do in these areas.”
Selassie disclosed that the IMF had a mission in Nigeria, where discussions with the authorities focused on issues related to the nation’s macroeconomic conditions.
Still, the director advised the federal government to consider reforms in other areas to engender more private sector investment, and also how more resources can be “adopted” to help Nigeria generate the revenues needed to build more schools, universities, and infrastructure.
“So there’s a comprehensive set of reforms that Nigeria can pursue that would help engender more growth and help diversify the economy away from reliance on oil,”
“And this diversification is all the more important given what we’re seeing happening to commodity prices.”
Selassie acknowledged that while the government is undertaking reforms, there will be a financing need.
He urged the authorities to adopt “a judicious and agile” way of dealing with the financing challenges the country faces.
The IMF official said Nigeria’s financing gap “can only be filled” by permanent sources such as revenue mobilisation in the long run.
“But in the interim, carefully looking at all of the options the country has to borrow in a contained way, will be part of that solution,” he said.
“And I think the government has been going about this prudently and cautiously so far, and we’re encouraged by that.”
In January, the Debt Management Office(DMO) said the total domestic debt was N73.4 trillion ($45.8 billion) while the total external debt was N68.8 trillion ($43 billion).
The debt body said the increase was primarily due to rising domestic borrowing and the impact of exchange rate depreciation on external debt when converted to naira terms.