Stakeholders in the Nigerian petroleum industry on Wednesday dismissed speculations on possible increase in the price of petrol.
In a statement issued after a meeting, the stakeholders said the price range of N135 to N145 was still tenable despite changes in foreign exchange.
Present at the meeting were the Group Managing Director, Nigerian National Petroleum Corporation, Dr. Maikainti Baru: Acting Executive Secretary, Petroleum Products Pricing Regulatory Agency, Mrs. Sotonye Iyoyo; Acting Executive Secretary, Petroleum Equalisation Fund, Mr. Ahmed Bobboi; Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore and the Executive Secretary, Depot and Petroleum Products Marketers Association, Mr. Olufemi Adewole, as well as chief executive officers of oil marketing companies.
“The meeting reviewed the state of the downstream sub-sector, especially as it relates to products supply, distribution, pricing and forex sourcing. The meeting also reviewed recent concerns expressed at certain quarters, on the sustainability of the current PMS price band.
“After exhaustive deliberations, stakeholders present were in the affirmative that the speculations of an imminent upward price review of the PMS was unfounded. “
It added, “This position is premised upon the fact that the current market fundamentals, as captured on the PPPRA pricing template for the PMS, confirmed that the market is operating within the existing price band of N135-N145 per litre. The claim is therefore both unfounded and deceptive, as there is no basis for pricing speculations as being circulated within the last few days.
“The PPPRA used the opportunity to assure all stakeholders of uninterrupted products supply and distribution, pursuant to the overall goal of facilitating a vibrant and robust downstream sub-sector. On his part, the Minister of State for Petroleum Resources assured all Nigerians of government’s continued commitment to the welfare and well-being of the citizenry.”
Manufacturers Association of Nigeria Raises Alarm as Unsold Goods Pile Up
The Manufacturers Association of Nigeria (MAN) has issued a stark warning about the escalating inventory of unsold goods, a crisis that threatens the very existence of companies within Nigeria’s production sector.
The association attributes this alarming trend to sustained pressure in the foreign exchange market coupled with the exorbitant cost of production.
As the value of the Nigerian naira continues to plummet in the foreign exchange market, MAN reports a 254% depreciation since the currency’s flotation by the Central Bank of Nigeria in June 2023.
This drastic decline has led to a surge in production costs, stoking inflation and eroding purchasing power, thereby dampening demand for manufactured goods.
MAN’s Director General, Segun Ajayi-Kadir, underscored the detrimental impact of the exchange rate crisis, inflation, and other macroeconomic challenges on the manufacturing sector.
Many warehouses and production plants across the country are now inundated with surplus inventory from the previous year, highlighting the severity of the situation.
Ajayi-Kadir warned that if left unaddressed, the mounting unsold goods could force manufacturers to halt production, inevitably leading to workforce downsizing and operational stagnation.
The dire economic conditions, exacerbated by the relentless depreciation of the naira, have rendered the current business environment unsustainable for many manufacturers.
In response to the crisis, manufacturers have adopted various strategies, including investing in backward integration to source raw materials locally and suspending operations altogether.
However, these measures may not suffice in alleviating the profound challenges facing the manufacturing sector.
The situation calls for urgent intervention from policymakers to address the root causes of the crisis and implement effective solutions to revitalize Nigeria’s manufacturing industry.
Failure to act decisively risks further exacerbating the economic downturn and exacerbating the plight of businesses across the country.
IBEDC Disconnects UCH Over N500m Debt, Critical Services Affected
The University College Hospital (UCH) in Ibadan, Oyo State, experienced a disruption in its power supply after the Ibadan Electricity Distribution Company (IBEDC) disconnected the hospital over a debt amounting to N500 million.
Dr. Jesse Otegbayo, the Chief Medical Director of UCH, confirmed the disconnection but refrained from elaborating on the exact cause.
IBEDC’s spokesperson, Busolami Tunwase, acknowledged the outstanding debt owed by UCH but denied that the disconnection was intentional.
Tunwase stated that while UCH owed the substantial amount, the power outage was due to a technical fault in the area, coinciding with the debt situation.
Despite repeated attempts to engage UCH in discussions to settle the debt, IBEDC had resorted to disconnection as a last resort.
The disconnection poses significant challenges to UCH’s critical services, affecting patient care and hospital operations.
While IBEDC emphasized its understanding of the hospital’s importance and commitment to resolving the issue amicably, the situation underscores the financial strains faced by healthcare institutions and the essential need for reliable power supply.
Efforts to negotiate and find a resolution between UCH and IBEDC are ongoing to restore normal operations and ensure uninterrupted healthcare services.
Oil and Gas Dealers Threaten Withdrawal as 70% of Downstream Businesses Collapse
The downstream oil sector in Nigeria faces a looming crisis as oil and gas dealers, represented by the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), issue a stern warning of potential service withdrawal.
In a recent resolution following their executive committee meeting in Abuja, NOGASA expressed grave concerns over the collapse of approximately 70% of businesses in the industry due to the harsh operating environment.
President of NOGASA, Benneth Korie, highlighted the dire situation, emphasizing the challenges faced by oil marketers in funding operations amidst soaring bank interest rates.
Korie underscored the overwhelming burden faced by operators who are compelled to acquire funds at exorbitant interest rates upwards of 30%, exacerbating financial strain and hindering business viability.
The primary demand voiced by NOGASA is the pegging of the foreign exchange rate at N750/$ to facilitate refinery operations and stimulate the production of refined products domestically.
Failure to address these pressing issues, Korie warned, could result in the withdrawal of services by NOGASA’s over 200 members starting from the next month.
The downstream oil crisis coincides with heightened anticipation for the release of refined petroleum products from the Dangote and Port Harcourt refineries, seen as critical for alleviating supply shortages nationwide.
However, amidst forex crises and inflationary pressures, operators in the oil and gas sector confront mounting economic challenges, necessitating urgent government intervention.
As Nigeria navigates through turbulent economic waters, stakeholders eagerly await decisive action from authorities to salvage the downstream oil sector from imminent collapse and avert potential disruptions in fuel supply chains.
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