As global oil prices continue to fall, proceeds from the sale of Nigeria’s crude oil and gas have dropped by N30.01bn ($150.4m) in just two month, figures from the latest financial and operations report of the Nigerian National Petroleum Corporation have shown.
The drop of N30.01 drop was recorded between October and December 2015, the report stated.
According to the NNPC, the country raked in $420.3m (N84.1bn) as proceeds from the sale of oil and gas in October last year. But in December, the earnings dropped to $269.9m (N53.98bn).
The report stated that the country’s total revenue from the oil and gas in 2015 was $4.6bn (N920bn), which was a far cry from $30bn (N6tn) generated from the same source in 2012 as published by the Nigerian Extractive Industries Transparency Initiatives.
In the latest report, the national oil firm stated that the highest monthly dollar income generated from the oil and gas sales in 2015 was $475.24m and this was recorded in March.
It gave that the least monthly revenue as $233.26m, which was recorded in August.
Similarly, the report showed that the NNPC earned N661.34bn from the sale of white products, petrol and kerosene in the year under review.
According to the report, a total of N80.34bn was collected from the sale of white products by the Pipelines Product and Marketing Company in December 2015 compared with N66.96bn, which was realised in November 2015.
“The total revenue generated from the sale of white products for the period of January to December 2015 stands at N661.34bn where Premium Motor Spirit (popularly referred to as petrol) contributed about 88.02 per cent of the revenue collected with a total of N582.14bn,” it said.
The NNPC stated that a total of 1,076.35 million litres of white products were distributed and sold by the PPMC in December 2015 compared with 908.02 million litres in November 2015.
This, it said, was comprised of 983.19 million litres of the PMS; 81.02 million litres of kerosene and 12.14 million litres of diesel.
“The total sale of white products for the period of January to December 2015 stands at 9.07 billion litres. The PMS was 7.49 billion litres and accounts for 82.61 per cent,” the report stated.
Economists as well as operators in the oil and gas sector have called on the government to diversify the country’s economy, as revenue generation from oil and gas has continued to fall, particularly since 2015.
They noted that the fall in global oil prices was not good for the Nigerian economy and the cost of the commodity might continue to plunge.
According to them, the crude oil market is already saturated as more international firms now produce the product.
A former President, Association of National Accountants of Nigeria, Dr. Samuel Nzekwe, told our correspondent that crude oil prices had been falling since last year, adding that the development had adversely affected the Nigerian economy.
He said, “The price of crude oil in the international market has been falling and this has affected Nigeria’s revenue badly. Considering the manner in which crude price is falling, the best thing for us to do as a country is to intensify efforts in diversifying our economy, because it may continue to fall even by next year.”
The Assistant National Secretary, Nigerian Electricity Consumer Advocacy Network, Mr. Obong Eko, also said, in view of the plunge in crude oil prices, the best alternative for Nigeria at the moment was to diversify the economy.
“I think one of the best alternatives for us as country at the moment is to diversify the economy,” he said.
No Plan to Increase Fuel Price; Says FG
The Federal Government has stated that it has no plan to increase fuel price during the yuletide period.
This assurance is coming amid the nationwide fuel scarcity which has pushed the price of petrol above N250 in many retail stations.
Investors King learnt that fuel is being held for N250 per litre in Abuja and several other cities across the country while black marketers are charging between N400 and N450 per litre.
The scarcity and the high price of fuel are however becoming unbearable for many Nigerians, especially those who have reasons to embark on business travel for the December festivals.
According to the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Ukadike Chinedu, most of the association members, who owned the bulk of the filling stations across the country, were now subjected to purchasing PMS at about N220/litre, which was why many outlets currently dispensed at about N250/litre and above.
He noted that the cost of the commodity has been on the rise due to its unavailability and other concerns in the sector.
He added that the price of fuel could be sold from N350/litre to N400/litre before the end of the year.
Meanwhile, a number of senior officials at the NNPC had stated that the subsidy was becoming too burdensome on the national oil company, as this was another reason for the scarcity of PMS.
According to a source who is familiar with the development as reported by Punch News, “How can we continue to import 60 million litres of petrol daily and keep subsidising it, while millions of litres are either diverted or cannot be accounted for? The burden is too much, as you rightly captured in that story”.
Investors King understands that NNPC is the sole importer of petroleum into the country and it pays billions of naira every month to subsidise the product to N147 per litre.
Reuters News reported that in August 2022, NNPC paid more than $1 billion as fuel subsidy while the federal government earmarked N3.6 trillion as fuel subsidy in the 2023 budget proposal.
Fuel Scarcity: NNPC Declares 2billion Liters in Stock, Blames Scarcity on Road Construction
NNPC Claimed it as 2 billion litres of fuel despite scarcity
The Nigerian National Petroleum Company (NNPC) has blamed the recent fuel scarcity on road construction around Apapa, noting that the corporation has about 2 billion litres of fuel in stock.
According to a statement issued by NNPC Executive Vice President, Downstream, Mr Adeyemi Adetunji, the Nigeria National Petroleum Company has about 2 billion litres of fuel which can last the country conveniently for more than 30 days.
The Executive Vice President further blamed the queues on the road construction around Apapa axis which has slowed down the movement of oil trucks to several parts of the country.
“The recent queues in Lagos are largely due to ongoing road infrastructure projects around Apapa and access road challenges in Lagos” he said.
He however noted that more filling stations should have Premium Motor Spirit (PMS) otherwise known as petrol with the ease in gridlock along the apapa axis.
“The gridlock is easing out and NNPC Ltd has programmed vessels and trucks to unconstrained depots and massive load outs from depots to states are closely monitored,” he said.
Investors King gathered that several states including Abuja have been impacted by the supply chain difficulty caused by the construction around Apapa.
The scarcity of fuel has therefore led to the hike in price. In most places across the country, fuel is sold as high as N250 per litre. Several fuel stations are already taking advantage of the situation coupled with the increase in the movement of people and goods owing to the December festivals.
Speaking further, Adeyemi noted that the situation will soon be back to normalcy as NNPC is taking measures to address the situation.
“We want to reassure Nigerians that NNPC has sufficient products and we significantly increased product loading in selected depots and extended hours at strategic stations to ensure sufficiency nationwide.
“We are also working with industry stakeholders to ensure normalcy is returned as soon as possible,” he concluded.
Global Growth to Drop Below 2% in 2023, Says Citi
Citigroup on Wednesday forecast global growth to slow to below 2% next year, echoing similar projections by major financial institutions such as Goldman Sachs, Barclays, and J.P. Morgan.
Strategists at the brokerage cited continued challenges from the COVID-19 pandemic and the Russia-Ukraine war — which skyrocketed inflation to decades-high levels and triggered aggressive policy tightening — as reasons behind the outlook.
“We see global performance as likely (being) plagued by ‘rolling’ country-level recessions through the year ahead,” said Citi strategists, led by Nathan Sheets.
While the Wall-Street investment bank expects the U.S. economy to grow 1.9% this year, it is seen more than halving to 0.7% in 2023.
It expects year-on-year U.S. inflation at 4.8% next year, with the U.S. Federal Reserve’s terminal rate seen between 5.25% and 5.5%.
Among other geographies, Citi sees the UK and euro area falling into recession by the end of this year, as both economies face the heat of energy constraints on supply and demand front, along with tighter monetary and fiscal policies.
For 2023, Citi projects UK and euro area to contract 1.5% and 0.4%, respectively.
In China, the brokerage expects the government to soften its zero-COVID policy, which is seen driving a 5.6% growth in gross domestic product next year.
Emerging markets, meanwhile, are seen growing 3.7%, with India’s 5.7% growth — slower than this year’s 6.7% prediction — seen leading among major economies.
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