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Nigeria’s Petrol Import Drops by Nine Million Litres in 2016

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Oil and Gas
  • Nigeria’s Petrol Import Drops by Nine Million Litres in 2016

The volume of importation of Premium Motor Spirit (PMS) also called petrol, dropped from 14 billion litres in 2015, to 4.89 billion litres in 2016, according to the National Bureau of Statistics (NBS).

The difference in the volume of petrol import in the country was only possible through federal government’s ongoing reform of the downstream sector, which eliminated fraud in the system.

At the pump price of N145 per litre, Nigeria effectively saved a whopping N1.3 trillion from the nine billion litres dip in importation.

Analysts believe that import volumes can be drastically reduced even further, if government revamped the local refineries, while new ones are underway.

With the five existing refineries performing below their installed capacities, Nigeria currently imports more than 90 per cent of her domestic fuel needs estimated at over N3 trillion annually, almost half of the national budget.

For decades the country has struggled with getting the refineries to work at optimum capacity without much success, as the turnaround maintenance (TAM) for the refineries were abandoned for almost the same length of time, which plunged them into the current state of dilapidation.

But the Nigerian National Petroleum Corporation (NNPC), owners of four of the refineries, has promised to get them to work to at least 60 percent of their installed capacity this year, amid serious scepticism, while the fifth refinery, a private plant of just 1,000 barrels daily only produces automotive gas oil (AGO) or diesel.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had earlier disclosed that the present administration was able to block unaccounted fraud impacted volume for petrol in 2016, which is nearly 40 per cent of the country’s consumption.”

Savings from fraud-impacted volume, Kachikwu said, could be directed toward infrastructure development in the country’s downstream sector.

According to him, “We noticed that the consumption of PMS has shifted from over 50 million litres a day to about 28 million per day. This means we have been able to take away unaccounted fraud impacted volume of petrol, which is nearly 40 per cent of the country’s consumption.”

Meanwhile, the NBS report the highest importation of petrol in May 2016, with 2.02billion litres worth N249.88billion.

This coincided with the Federal Government’s announcement of the partial deregulation of the PMS sub-sector on May 11, 2016, aimed at improving its supply nationwide.

Statewide distribution of truck-out volume for Q4 2016, showed that 4.83billion of PMS, 1.00 billion litres of AGO and 182.95 million litres of kerosene were distributed nationwide during the period under review.

Specifically for the Q4 2016, 4.83billion litres of PMS, 1.00 million litres of AGO and 182.9 million litres of HHK, valued at N629.6billion, N136.1billion and N24.7billion respectively, were imported into the country.

The Group Managing Director of NNPC, Dr Maikanti Baru, revealing his strategy to achieve 60 percent capacity utilisation, said: “We are putting together various programmes to ensure that we achieve at least 60 per cent local refining by the end of this year. It is the procedure or methodology that we are changing a little bit, we are focusing on the process licensors to come and audit our processes and they have already started auditing most of our process units in the various refineries.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Crude Oil Pulled Back Despite Joe Biden Stimulus

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Crude Oil Pulled Back Despite Joe Biden Stimulus

Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.

Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.

On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.

OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”

Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.

The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.

Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.

But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.

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Crude Oil

OPEC Says Uncertainties Remain High in 2021

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OPEC Says Uncertainties Remain High in 2021

The Organization of the Petroleum Exporting Countries (OPEC) on Thursday said global uncertainties remained high going forward in 2021 but kept its oil demand forecast unchanged.

In the cartel’s latest oil outlook for 2021, oil demand is expected to increase by 5.9 million barrels per day year on year to 95.9 million barrels per day. The prediction was unchanged from December’s assessment.

However, OPEC and allies, said: “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”

“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.

Crude oil rose to $57 per barrel this week after incoming US President Joe Biden announced it would inject $1.9 trillion stimulus into the world’s largest economy.

But the recent rally in the commodity and stimulus announcement is expected to boost US crude oil output and disrupt OPEC+ production cuts strategy for the year.

The 2021 supply outlook is now slightly more optimistic for U.S. shale with oil prices increasing, and output is expected to recover more in the second half of 2021,” OPEC said.

Still, OPEC, in its forecast “assumes a healthy recovery in economic activities including industrial production, an improving labour market and higher vehicle sales than in 2020.”

“Accordingly, oil demand is anticipated to rise steadily this year supported primarily by transportation and industrial fuels,” the group said.

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Crude Oil

Brent Crude Oil Rose to $56.25 Per Barrel

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Brent Crude Oil Rose to $56.25 Per Barrel

Oil price surged following the declaration of Joe Biden as the President-elect of the United States of America last week after Trump’s mob invaded Capitol to disrupt a joint Senate session.

Also, the large drop in US crude inventories helped support crude oil price to over 11 months despite the second wave of COVID-19 crushing the world from Asia to Europe to America.

Brent crude oil, against which Nigerian Crude oil is priced, rose to $56.25 per barrel on Friday before pulling back to $55.422 per barrel on Monday during the London trading session.

Experts attributed the pullback to the rising number of COVID-19 cases in Asia with about 11 million people already locked down in Hebei province in China.

Covid hot spots flaring again in Asia, with 11 million people (in) lockdowns in China Hebei province… along with a touch of FED policy uncertainty has triggered some profit taking out of the gates this morning,” Stephen Innes, chief global market strategist at Axi, said in a note on Monday.

China, the world’s largest importer of crude oil, has joined the United Kingdom and others declaring full or partial lockdown to curb the second wave of COVID-19.

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