The downstream sector of the Nigerian oil and gas industry is set to undergo complete deregulation in the coming months, and industry stakeholders are warning that Nigerians should prepare for petrol prices as high as N750 per litre at filling stations.

During an online workshop, organised by industry stakeholders in collaboration with the African Refiners and Distributors Association (ARDA), participants outlined strategies and measures that should be deployed to ensure sustainable removal of petrol subsidy.

National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Chinedu Okoronkwo, warned Nigerians of the impending price hike and urged the government to channel expected savings from subsidy removal to provision of palliatives for the masses.

Although the projected pump price is likely to drop to around N500 if the government encourages the Central Bank of Nigeria (CBN) to provide foreign exchange for marketers at the official rate, the high cost of petrol will undoubtedly have a significant impact on the already struggling Nigerian economy.

Nigeria is currently struggling to find buyers for its crude oil, with strikes in the French refining sector and seasonal maintenance at plants elsewhere in Europe cutting into the Organisation of Petroleum Exporting Countries (OPEC) producer’s sales.

In light of these challenges, former Chief of Policy and Plans, Nigerian Navy, Rear Admiral Henry Babalola (rtd), called on the federal government to prosecute persons involved in oil theft for treason. Babalola expressed disappointment with the government’s poor handling of the oil theft issue, which he said was destroying the country’s revenue base.

The deregulation of the downstream sector is expected to end the wasteful petrol subsidy regime before the end of President Muhammadu Buhari’s tenure on May 29, 2023.

As Nigerians brace for the anticipated price hike, it is crucial that the government implements appropriate palliatives to alleviate the burden on the masses and ensure transparency in communication about the issue.

Oil prices rose on Monday as investors evaluated efforts by authorities to address concerns about the global banking system.

Brent crude oil, against which Nigerian oil is priced increased by 1.03% or 77 cents, reaching $75.76 a barrel at 9:00 am, while the US West Texas Intermediate crude rose by 1.03% or 74 cents to $70 a barrel. This follows a 2.8% increase in Brent and a 3.8% rebound in WTI as concerns in the banking sector decreased.

Despite the oil fundamentals remaining on the sidelines, crude markets are observing the sentiment in the financial market, according to Vandana Hari, the founder of oil market analysis provider Vanda Insights.

Hari stated, “Expect most price action in Brent and WTI futures to occur during the Europe and US trading hours, marked by plenty of intraday volatility.” Hari added that a strong rebound is not expected until the banking crisis is fully resolved, which may take days or weeks.

In other news, First Citizens BancShares Inc announced that it will acquire the deposits and loans of Silicon Valley Bank, closing one chapter in the financial market crisis. Furthermore, the US authorities are reportedly discussing expanding emergency lending facilities, which has given hopes for additional support for bank funding.

Oil prices have also gained support from Russian President Vladimir Putin’s announcement to place tactical nuclear weapons in Belarus, which has escalated tensions in Europe. It is one of Russia’s most significant nuclear signals yet, and it serves as a warning to NATO over its military support for Ukraine.

In response, Ukraine has called for a meeting of the United Nations Security Council, and NATO criticized Putin’s “dangerous and irresponsible” nuclear rhetoric.

Despite the rise in oil prices, Russia’s Deputy Prime Minister Alexander Novak has reported that Moscow is on the verge of achieving its target of reducing crude output by 500,000 barrels per day (bpd) to around 9.5 million bpd.

However, according to industry sources and Reuters calculations, Russia’s crude exports are expected to remain steady as it cuts refinery output in April. Since September 2022, Russian crude stocks have been increasing, and experts suggest that if Russia wants to draw down the inventories it has built, output cuts may need to be extended beyond June.

Meanwhile, in France, industrial action is affecting refineries, reducing crude demand and fuel production. Investors are awaiting China’s manufacturing and services purchasing managers’ indexes for cues on demand from the world’s leading crude oil importer.

According to Baker Hughes Co, oil rigs rose by four to 593 last week in the US, up for the first time in six weeks, while gas rigs held steady at 162.

The National Agency for Science and Engineering Infrastructure (NASENI) which recently laid the foundation for its solar cell production factory in Gora, Nasarawa state Nigeria, has positioned to be a game changer in the nation’s energy sector.

The Executive Vice-chairman and Chief Executive of NASENI during the foundation laying ceremony Prof. Mohammad Sani Haruna disclosed that the agency has embarked on a $325,860,690 solar cells production plant to make power affordable.

He stated that the agency’s goal was to use science, innovation, and technology, to advance local contends interventions in power sector reforms.

In his words, “The cost of solar energy is still beyond the affordability of an average Nigerian hence the necessity of this project. When fully commissioned, the price per watt of solar power supply will be cheap enough to be affordable to everyone and it is a game changer in the energy and power supply industry as well as industrial development in Nigeria. This singular project has the capacity to positively change the energy status of Nigeria, the region, and the continent of Africa since it is the first of its type”.

Also present at the foundation laying ceremony, Nigeria’s Vice President Prof. Yemi Osinbajo disclosed that the solar cell production factory will lead to solar manufacturing in the country. He was also positive that the NASENI solar cell production plant will meet and surpass expectations when it becomes fully operational.

In his words,

“This landmark achievement places Nigeria within the ranks of countries pushing the boundaries in the use of climate-smart energy sources, particularly solar power. And as we have heard, this particular project is built on 10 years of work. 10 years ago, NASENI established its 7.5mw solar panel production plant. Its capacity is now 21MW. NASENI solar cell production factory in Nigeria will be a game changer, given the urgency of climate action today and the importance of developing African green energy manufacturing and solutions”.

The National Agency for Science and Engineering Infrastructure (NASENI) last year stated that it received a directive from President Muhammadu Buhari to produce more solar cells to boost Nigeria’s alternative power sources.

Investors King understands that for over 10 years, NASENI has been consistent in championing solar power as an alternative to hydro and fossil power. The agency’s target is to contribute 50 megawatts of solar energy to Nigeria’s electricity by 2023. The agency has already achieved about 21 Megawatts per annum with installed capacity through its NASENI Solar Energy Limited, a manufacturing plant located in Karshi, Abuja.

In Nigeria, the rapid population increase and the overreliance on fossil fuel have no doubt created significant environmental, health, and economic consequences which have led to severe socio-economic drawbacks.

Also, the energy deficit has led to poverty, economic decline, hardship, and several negative impacts. That is to say that a constant and stable energy supply is fundamental to the development of the country. With the commencement of the NASENI solar cell production plant and the agency’s commitment to enhance Nigeria’s energy sector, it is not far-fetched to say that the nation will record several remarkable achievements as a result of improved energy supply.