- 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.
Oil Posts 2% Gain for the Week Despite India Virus Surge
Oil prices steadied on Friday and were set for a weekly gain against the backdrop of optimism over a global economic recovery, though the COVID-19 crisis in India capped prices.
Brent crude futures settled 0.28% higher at $68.28 per barrel and U.S. West Texas Intermediate (WTI) crude advanced 0.29% to $64.90 per barrel.
Both Brent and WTI are on track for second consecutive weekly gains as easing restrictions on movement in the United States and Europe, recovering factory operations and coronavirus vaccinations pave the way for a revival in fuel demand.
In China, data showed export growth accelerated unexpectedly in April while a private survey pointed to strong expansion in service sector activity.
However, crude imports by the world’s biggest buyer fell 0.2% in April from a year earlier to 40.36 million tonnes, or 9.82 million barrels per day (bpd), the lowest since December.
In the United States, the world’s largest oil consumer, jobless claims have dropped, signalling the labour market recovery has entered a new phase as the economy recovers.
The recovery in oil demand, however, has been uneven as surging COVID-19 cases in India reduce fuel consumption in the world’s third-largest oil importer and consumer.
“Brent came within a whisker of breaking past $70 a barrel this week but failed at the final hurdle as demand uncertainty dragged on prices,” said Stephen Brennock at oil brokerage PVM.
The resurgence of COVID-19 in countries such as India, Japan and Thailand is hindering gasoline demand recovery, energy consultancy FGE said in a client note, though some of the lost demand has been offset by countries such as China, where recent Labour Day holiday travel surpassed 2019 levels.
“Gasoline demand in the U.S. and parts of Europe is faring relatively well,” FGE said.
“Further out, we could see demand pick up as lockdowns are eased and pent-up demand is released during the summer driving season.”
Lagos Commodities and Futures Exchange to Commence Gold Trading
With the admission of Dukia Gold’s diversified financial instruments backed by gold as the underlying asset, Lagos Commodities and Futures Exchange is set to commence gold trading.
According to Dukia Gold, the instruments will be in form of exchange-traded notes, commercial papers and other gold-backed securities, adding that it will enable the company to deepen the commodities market in Nigeria, increase capacity, generate foreign exchange for the Nigerian government to better diversify foreign reserves and create jobs across the metal production value chain.
Tunde Fagbemi, the Chairman, Dukia Gold, disclosed this while addressing journalists at Pre-Listing Media Interactive Session in Lagos on Thursday.
He said, “We are proud to be the first gold company whose products would be listed on the Lagos Futures and Commodities Exchange. The listing shall enable us facilitate our infrastructure development, expand capacity and create fungible products.
“This has potential to shore up Nigeria’s foreign reserve and create an alternative window for preservation of pension funds. A gold-backed security is a hedge against inflation and convenient preservation of capital.”
“As a global player, we comply with the practices and procedures of London Bullion Market Association and many other international bodies. Our refinery will also have multiplier effects on the development of rural areas anywhere it is located,” he added.
Mr Olusegun Akanji, the Divisional Head, Strategy and Business Solutions, Heritage Bank, said the lender had created a buying centre for verification of quality and quantity of gold and reference price to ensure price discovery in line with the global standard.
Oil Nears $70 as Easing Western Lockdowns Boost Summer Demand Outlook
Oil prices rose for a third day on Wednesday as easing of lockdowns in the United States and parts of Europe heralded a boost in fuel demand in summer season and offset concerns about the rise of COVID-19 infections in India and Japan.
Brent crude rose 93 cents, or 1.4%, to $69.81 a barrel at 1008 GMT. U.S. West Texas Intermediate (WTI) crude rose 85 cents, or 1.3%, to $66.54 a barrel.
Both contracts hit the highest level since mid-March in intra-day trade.
“A return to $70 oil is edging closer to becoming reality,” said Stephen Brennock of oil broker PVM.
“The jump in oil prices came amid expectations of strong demand as western economies reopen. Indeed, anticipation of a pick-up in fuel and energy usage in the United States and Europe over the summer months is running high,” he said.
Crude prices were also supported by a large fall in U.S. inventories.
The American Petroleum Institute (API) industry group reported crude stockpiles fell by 7.7 million barrels in the week ended April 30, according to two market sources. That was more than triple the drawdown expected by analysts polled by Reuters. Gasoline stockpiles fell by 5.3 million barrels.
Traders are awaiting data from the U.S. Energy Information Administration due at 10:30 a.m. EDT (1430 GMT) on Wednesday to see if official data shows such a large fall.
“If confirmed by the EIA, that would mark the largest weekly fall in the official data since late January,” Commonwealth Bank analyst Vivek Dhar said in a note.
The rise in oil prices to nearly two-month highs has been supported by COVID-19 vaccine rollouts in the United States and Europe.
Euro zone business activity accelerated last month as the bloc’s dominant services industry shrugged off renewed lockdowns and returned to growth.
“The partial lifting of mobility restrictions, the expectation that tourism will return in the near future, and the lure of the psychologically important $70 mark are all likely to have contributed to the price rise,” Commerzbank analyst Eugen Weinberg said.
This has offset a drop in fuel demand in India, the world’s third-largest oil consumer, which is battling a surge in COVID-19 infections.
“However, if we were to eventually see a national lockdown imposed, this would likely hit sentiment,” ING Economics analysts said of the situation in India.
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