Oil marketers on Saturday said it was possible to sell Premium Motor Spirit at N85 per litre.
They however expressed doubt if Nigerians were ready to absorb the fluctuations or modulations in the pump price of petrol beginning from next year.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had on Friday stated that from January 1, the pump price of petrol would be N85 per litre.
Kachikwu had stated that from the applicable market realities for the pricing modulation, government discovered that petrol would sell for either N85 or N86 per litre as a result of the fall in the international price of crude oil.
Reacting to the development, the Corporate Affairs Manager, NIPCO PLC, an oil marketing firm, Mr. Lawal Taofeeq, told our correspondent that although it was possible to sell the product at N85 per litre, many citizens may not be ready to pay higher cost, particularly if they do not understand what price modulation .
When asked if it was possible for the price of petrol to be at N85 per litre, Taofeeq said, “It is possible, but the issue that government needs to understand is that should there be fluctuation in price, are Nigerians ready to absorb it? “If the price of crude oil should go up again, will Nigerians be ready to pay the resultant increased cost for petrol? Now the government is taking advantage of the fact that the price of crude oil has fallen, what if the price goes up tomorrow, what will happen?
“So there is need for adequate education. We know the government is avoiding subsidy. It should let Nigerians know that there is no need for subsidy now based on the price of crude oil in the international market, but if the price goes up tomorrow, who takes the difference? How many Nigerians know what price modulation is all about?”
An official of the Major Oil Marketers Association of Nigerian also told our correspondent that the government should be bold enough to stop subsidy and tell Nigerians that its decision on the issue.
The official who pleaded not to be named in print, said, “I know they (government) don’t want to continue paying subsidy and many Nigerians know this too. They should come out boldly and say it, rather than using price modulation as excuse. However, I wonder what will happen if crude oil price begins to pick up again.
It is however possible to sell at N85 now.”
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.
The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.
The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.
The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.
Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.
The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
Oil Prices Recover from 4 Percent Decline as Joe Biden Wins
Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.
This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.
Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.
On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.
“There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.
“Either you’re crimping energy demand or consumption behavior.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
Revenue of OPEC Members to Drop to 18 Year Low in 2020
The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.
EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.
“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.
The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.
It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.
It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.
“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”
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