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Petrol Scarcity Looms as Product Sells for N142 per Litre in Depots



  • Petrol Scarcity Looms as Product Sells for N142 per Litre in Depots

Despite the pledge by oil marketers to support the federal government’s efforts in ensuring sustained and stable supply of petrol at the official pump price of N145 per litre, there are indications of imminent scarcity as some depot owners have jerked the ex-depot price to N142 per litre, against government’s approved N123.28 –N133.28 per litre ex-depot price band.

Rising from a two-day consultative forum of the downstream petroleum sector, which was recently convened by the Chief of Staff to the President, Mallam Abba Kyari, the marketers had restated their commitment to the N145 pump price and also pledged to ensure significant reduction in the price of diesel.

On May 11, 2016 when the current retail price band of N135 – N145 per litre took effect, the Petroleum Products Pricing Regulatory Agency (PPPRA) had fixed the indicative ex-depot price at N123.28 –N133.28 per litre for product that is in the depots, via circular No. A.4/9/017/C.2/IV/690.

However, for petrol that is still in the mother vessel at the high sea, the ex-depot price was fixed at N116.63 –N126.63 per litre as the marketer will incur additional expenses to hire daughter vessels to lift the product to the depots.

But investigation revealed that only six members of the Major Oil Marketers Association of Nigeria (MOMAN) – Forte Oil, Total, Mobil, Conoil, MRS and Oando- are loading petrol at government’s approved ex-depot price.

It was, however, gathered that the MOMAN members do not sell the product to other marketers but only to their own dealers and retail outlets.

According to investigation, majority of the independent marketers and depot owners sell above the official ex-depot price range, thus making it impossible for the retail outlets to sell at N145 per litre and break even.

Investigation further revealed that the ex-depot price in most of the depots ranges between N136, 139, 140 and N142 per litre.

It was further learnt that virtually all the product in the private depots is sourced from the Nigerian National Petroleum Corporation (NNPC) as Total Nigeria Plc is the only private marketer known to have imported petrol in the past two weeks, according to marketers who spoke to on the issue.

The NIPCO Plc, which also sells product to all marketers at government’s approved price, does not have petrol in its depot.

The company at the weekend, there was a notice to marketers by the company that it could not guarantee when product would be available.

Some of the marketers, who spoke on condition of anonymity, said the N145 per litre pump price was no longer sustainable as a result of the hike in ex-depot price.

“By the time you pay the union fees, which amount to over 50 kobo per litre; you pay the driver, cost of diesel for fuel, plus the extortion by security agents, you will end up at a huge loss,” said one of the marketers.

Following the hike in ex-depot price, the South West Zone of the Independent Petroleum Marketers Association of Nigeria (IPMAN) at the weekend threatened to stop lifting petrol from the depots.

The meeting of the downstream players convened at the instance of the Presidency, reviewed the state of the downstream sector and addressed issues that may impede the uninterrupted supplies of petroleum product leading to price distortions.

In attendance at the forum were Kyari; Minister of Finance, Mrs. Kemi Adeosun; Minister of State (Aviation), Senator Hadi Sirika; the Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele; Group Managing Director of NNPC, Dr. Maikanti Baru; Director-General, State Security Service (SSS), Mr. Lawal Daura; as well as the chief executive officers of major marketers, depot owners and independent marketers.

“Discussions focused on designing proactive measures that will balance supplies and maintain the fixed pump price of N145 per litre for petrol.

Furthermore, deliberations also extended to creating an affordable and stable price regime for deregulated products such as diesel and aviation fuel, which in recent times have been volatile,” MOMAN said in a statement at the end of the meeting.

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

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Africa Renewable Energy Fund II Secures €125 Million First Close With SEFA and CTF Investments



Solar energy - Investors King

The Africa Renewable Energy Fund II has achieved its first close at €125 million, following a joint investment of €17.5 million from The Sustainable Energy Fund for Africa and the Climate Technology Fund through the African Development Bank.

AREF II, a successor to the original Fund, is a 10-year closed-ended renewable energy Private Equity Fund with a $300 million target capitalization. The Africa Renewable Energy Fund II, managed by Berkeley Energy, invests in early-stage renewable energy projects, thereby not only de-risking the most uncertain phase of power projects, but also promoting increased green baseload in Africa’s generation mix.

The Sustainable Energy Fund for Africa and the Climate Technology Fund will each contribute roughly €8.7 million to mobilize private-sector investment into Africa’s renewable energy sector. The Sustainable Energy Fund for Africa will also contribute financing to the AREF II Project Support Facility, which funds technical assistance and early-stage project support to improve bankability.

Other investors include the U.K’s CDC Group, Italy’s CDP, the Netherlands Development Finance Company (FMO) and SwedFund.

“We are proud to be associated with Berkeley Energy and other like-minded investors, and look forward to AREF’s continued success and leadership in promoting sustainable power development on the continent,” said Dr. Kevin Kariuki, the African Development Bank’s Vice President for Power, Energy, Climate and Green Growth.

In 2012, the African Development Bank selected Berkeley Energy, a seasoned fund manager of clean energy projects in global emerging markets to set up AREF. AREF II has a sharper strategic focus than its predecessor on “green baseload” projects that will deliver firm and dispatchable power to African power systems through hydro, solar, wind and battery storage technologies.

Luka Buljan, Berkeley Energy’s Managing Director, said: “We are very excited to have reached this milestone with strong support from our backers. The catalytic tranche from the Sustainable Energy Fund for Africa and the Climate Technology Fund will assist in mobilising private institutional investors up to full fund size of €300 million. We now look forward to concluding the fundraising and delivering projects that will provide clean, reliable and affordable energy across African markets.”

“AREF is intertwined with the Sustainable Energy Fund for Africa’s history and success, and we have worked closely over the last decade to create precedents in difficult markets and challenging technologies. We look forward to continued collaboration to accelerate the energy transition in Africa,” said Joao Duarte Cunha, Manager for Renewable Energy Initiatives at the African Development Bank and Coordinator of the Sustainable Energy Fund for Africa.

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Crude Oil

FG Earned $34.22B From Crude Oil and Gas in 2019 – NEITI



Crude oil - Investors King

The Nigeria Extractive Industries Transparency Initiative (NEITI) on Thursday released its 2019 oil and gas industry audit report, which shows that Nigeria earned N34.22 billion from the oil and gas industry in 2019.

The audit, conducted by Adeshile Adedeji & Co. (Chartered Accountants), an indigenous accounting and auditing firm, reconciled payments from 98 entities. They include 88 oil and gas companies, nine government agencies and the Nigerian Liquefied Natural Gas (NLNG).

The 2019 figure is an increase of 4.88 percent over the $32.63billion revenue realised from the sector in 2018. A breakdown of the earnings showed that payments by companies accounted for $18.90billion, while flows from federation sales of crude oil and gas accounted for $15.32billion.

The report further showed that 10 years (2010-2019) aggregate financial flows from the oil and gas sector to government amounted to $418.544billion, with the highest revenue flow of $68.442 recorded in 2011, while the lowest revenue flow of $17.055 was recorded in 2016.

According to NEITI, the total crude oil production in 2019 was 735.244mmbbls, representing an increase of 4.87 percent over the 701.101mmbbls recorded in 2018. Production sharing contracts (PSCs) contributed the highest volumes of 312.042mmbbls followed by Joint Venture (JV) and Sole Risk (SR) which recorded 310,284mmbbls and 89.824mmbbls respectively. Others are Marginal Fields (MFs) and Service Contracts (SCs) which accounted for 21,762mmbbls and 1,330mmbbls respectively.

The report also showed that total crude oil lifted in 2019 was 735.661mmbbls, indicating a 4.93 percent increase to the 701.090 mmbbls recorded in 2018, with companies lifting 469.010mmbbls, while 266.650mmbbls was lifted by the Nigeria National Petroleum Corporation (NNPC) on behalf of the federation.

Analysis of crude oil lifted by NNPC showed that 159.411mmbbls was for export, while 107.239mmbbls was for domestic refining. 97 percent of the volumes for domestic refining (104.475mmbbls) was utilised for the Direct Sale Direct Purchase (DSDP) programme while the remaining 3 percent (2.764mmbbls) was delivered to the refineries.

NEITI reported that the value of the 2019 domestic crude oil earnings was N2.722 trillion. Of this figure, N518.074billion was deducted for Petroleum Motor Spirit (PMS) under-recovery by the NNPC.

This figure was N213.074billon above the approved sum of N305billion for under-recovery in 2019. Similarly, the sum of N126.664billion was incurred by the Corporation as costs for pipeline repairs and maintenances which showed a difference of N96.378billion from the approved sum of N30.287billion for that purpose.

The report also pointed out that N31.844billion was also deducted for crude and product losses due to theft.

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Crude Oil

Oil Prices Drop on Stronger U.S Dollar



Crude oil - Investors King

The strong U.S Dollar pressured global crude oil prices on Thursday despite the big drop in U.S crude oil inventories.

The Brent crude oil, against which Nigerian oil is priced, dropped by 74 cents or 1 percent to settle at $73.65 a barrel at 4.03 am Nigerian time on Thursday.

The U.S West Texas Intermediate crude oil depreciated by 69 cents or 1 percent to $71.46 a barrel after reaching its highest since October 2018 on Wednesday.

Energy markets became so fixated over a robust summer travel season and Iran nuclear deal talks that they somewhat got blindsided by the Fed’s hawkish surprise,” said Edward Moya, senior market analyst at OANDA.

The Fed was expected to be on hold and punt this meeting, but they sent a clear message they are ready to start talking about tapering and that means the dollar is ripe for a rebound which should be a headwind for all commodities.

The U.S. dollar boasted its strongest single day gain in 15 months after the Federal Reserve signaled it might raise interest rates at a much faster pace than assumed.

A firmer greenback makes oil priced in dollars more expensive in other currencies, potentially weighing on demand.

Still, oil price losses were limited as data from the Energy Information Administration showed that U.S. crude oil stockpiles dropped sharply last week as refineries boosted operations to their highest since January 2020, signaling continued improvement in demand.

Also boosting prices, refinery throughput in China, the world’s second largest oil consumer, rose 4.4% in May from the same month a year ago to a record high.

This pullback in oil prices should be temporary as the fundamentals on both the supply and demand side should easily be able to compensate for a rebounding dollar,” Moya said.


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