- Independent Marketers Threaten to Stop Lifting Fuel This Week
The over 3, 000 fuel dealers in the South-West geopolitical zone of the country under the aegis of the Independent Petroleum Marketers Association of Nigeria have threatened to stop dispensing fuel in their various outlets this week.
It was learnt that many of the marketers had stopped dispensing fuel since last week when they exhausted their stock and refused to lift new product because they could no longer afford to run the business at a loss.
The IPMAN Chairman in the South-West, Mr. Debo Ahmed, lamented that private depot owners were selling the product at an exorbitant price.
He said, “The result of this is that about 90 per cent of our members who can no longer continue with the business, have already stopped lifting fuel while the remaining 10 per cent have threatened to also close down their stations if nothing was done to remedy the situation this (last) week.
“Unfortunately we cannot sell above the pump price of N145 per litre in the South-West if we don’t want to incur the wrath of the Department of Petroleum Resources. Our colleagues in the North, South-East and South-South are running their own businesses because they are selling above the pump price.”
Ahmed urged the Federal Government to fully deregulate the petroleum sector so that individuals could buy and sell the product at a price considerate enough to keep everyone in business.
Another executive of the association, who spoke on condition of anonymity, said his members bought fuel at N145 from private depots in Apapa, Ejigbo, and Oghara.
According to him, the non-availability of the product at depots owned by the Nigerian National Petroleum Corporation for some years has compounded the problem.
He said, “We decided not to cause panic by not openly announcing our intention to stop lifting fuel. The people will start feeling the effect as from Monday if the government fails to do anything about it. We have held series of meetings with the owners of private depots to reduce their price but they refused, claiming that it would affect their business too.
“I am still running some of my stations because I have my own trucks. I bought fuel at N143 per litre at a private depot in Apapa and would transport a litre with N6 to Akure and other towns. This means I am running at a loss because I have to sell at N145, being the official pump price. I am doing this just to keep the stations running. I usually load eight trucks. But I load just two now.”
The IPMAN Chairman, Ore Depot branch, Mr. Shina Amao, also confirmed the development and attributed the problem to the non-functional state of NNPC-owned depots where the product could be bought at N133.38k.
He said, “Government should, without further delay, resume the pumping of fuel to the NNPC-owned depots in Ore, Ibadan (Mosimi), Ejigbo and Warri so that we can buy at the official landing cost of N133.28k as against the N145 per litre at the private depots.”
Gold Gained Ahead of Joe Biden Inauguration 2021
Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.
The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.
He said, “The key factor appears to be the (U.S.) currency.”
As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.
Also, the effectiveness of the vaccines can not be ascertained until wider rollout.
Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.
Crude Oil Holds Steady Above $55 Per Barrel on Tuesday
Brent Crude oil, against which Nigerian crude oil is priced, rose from $54.46 per barrel on Monday to $55.27 per barrel as of 9:03 am Nigerian time on Tuesday.
Last week, Brent crude oil rose to 11 months high of $57.38 per barrel before pulling back on rising COVID-19 cases and lockdowns in key global economies like the United Kingdom, Euro-Area, China, etc.
While OPEC has left 2021 oil demand unchanged and President-elect Joe Biden has announced a $1.9 trillion stimulus package, experts are saying the rising number of new cases of COVID-19 amid poor vaccine distribution could drag on growth and demand for oil in 2021.
On Friday, Dan Yergin, vice-chairman at IHS Markit, said in addition to the stimulus package “There are two other things that are going with it … one is of course, vaccinations — in the sense that eventually this crisis is going to end, and maybe by the spring, lockdowns will be over.”
“The other thing is what Saudi Arabia did. This is the third time Saudi Arabia has made a sudden change in policy in less than a year, and this one was to announce (the) 1 million barrel a day cut — partly because they are worried about the impact of the surge in virus that’s occurring,” he said.
Also, the stimulus being injected into the United States economy could spur huge Shale production and disrupt OPEC and allies’ efforts at balancing the global oil market in 2021.
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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