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Prices of Petroleum Products Increase by 24.20, 9.28 Percent in October

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  • Prices of Petroleum Products Increase by 24.20, 9.28 Percent in October

The average prices of National Household Kerosene, Liquefied Natural Gas also known as cooking gas, and Automotive Gas Oil (diesel) increased by 3.39, 24.20 and 9.28 per cent respectively during the month of October, latest data from the National Bureau of Statistics has shown.

The monthly report released Wednesday, revealed that the average price per litre paid by consumers for kerosene increased by 3.39 per cent from N264.48 in September 2017 to N273.44 in October 2017.NBS put the States with the highest average price per litre of kerosene to be Oyo, N324.76, Borno, N323.61; and Rivers, N320.37.

States with the lowest average price per litre of kerosene were Osun, N233.33; Ondo, N237.50; and Enugu, N237.78.Also, average price per gallon paid by consumers for kerosene increased by 6.31 per from N973.72 in September 2017 to N1,035.12 in October 2017.The agency listed the States with the highest average price per gallon of kerosene to include Adamawa, N1,185.83; Benue, N1,175.00; and Ondo, N1,160.00.

States with the lowest average price per litre of kerosene were Lagos, N912.11; Sokoto, N918.33; and Anambra, N927.00.Similarly, the average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas (Cooking Gas) increased by 24.20 per cent from N 1,911.44 in September 2017 to N2, 374.07 in October 2017.

According to NBS, States with the highest average price for the refilling of a 5kg cylinder for cooking gas during the month under review were Bauchi & Osun, N2,500.00; Yobe, N2,433.33; and Katsina, N2,412.50.

States with the lowest average price for the refilling of a 5kg cylinder for cooking gas were Taraba & Oyo, N2,200.00; Sokoto & Ebonyi, N2,300.00; and Benue, N2,328.57.Moreover, average price fort he refilling of a 12.5kg cylinder for cooking gas decreased by 2.60 per cent from N3,937.71 in September 2017 to N4,561.14 in October 2017.

States with the highest average price for the refilling of a 12.5kg cylinder for cooking gas were Sokoto, N4,766.67; Abia, N4,712.50; and Anambra, N4,692.31.States with the lowest average price for the refilling of a 12.5kg cylinder for cooking gas were Nasarawa, N4,359.38; Kano & Bayelsa, N4,400 and Kebbi, N4,420.00.

Also, the average price paid by consumers for Automotive Gas Oil (diesel) increased by 9.28 per cent from N 184.80 in September 2017 to N201.96 in October 2017.NBS put the States with the highest average price of diesel to include Jigawa, N222.08; Zamfara, N218.75; and Adamawa, N217.50.

While the States with the lowest average price of diesel were Cross River, N190.29; Delta, N190.06; and Borno, N189.69. The price paid by consumers to buy a litre of Premium Motor Spirit (PMS) also known at petrol, increased by 0.1 per cent from N144.5 in September 2017 to N146 in October 2017.

According to NBS, States with the highest average price of petrol were Yobe, N 152.50); Benue, N 150.83; and Ebonyi, N148.57.States with the lowest average price of petrol were Ekiti and Katsina, N143.73; Jigawa, N143.80 and Abuja Federal Capital Territory, N144.

Speaking recently on petroleum product supply in Nigeria, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, assured that it would ensure a hitch-free supply of petroleum products nationwide during the season. He charged that the NNPC ensure steady supply of petroleum products even well beyond the festive periods hitherto often characterized by supply hiccups.

The festive season is fast approaching, a period when almost always, people expect queues to happen. If last year you had a queue-free festive season, we want this year’s to be a season where fuel station attendants will be inviting motorists to their stand for fueling”, he charged.

Baru prodded the Petroleum Products Marketing Company (PPMC) Management to re-strategized to ensure leaner operating cost that would enable it continuously add value to the NNPC Corporate entity, adding that the company was not expected to make losses.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Nigeria’s Oil Sector Sees $16.6bn Investment Boost, Plans $20bn Expansion

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Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, announced on Monday that approximately $16.6 billion in investments have been committed over the past year.

This significant influx of capital marks a period of rejuvenation for the oil sector following years of stagnation caused by policy inconsistencies and the delayed passage of the Petroleum Industry Act.

Lokpobiri shared these updates during a briefing in Abuja, where he highlighted the achievements in the oil sector since President Bola Tinubu assumed office on May 29, 2023.

The minister emphasized that the government’s efforts to create a more investment-friendly environment have paid off, attracting substantial foreign and domestic investments.

Rekindling Investor Confidence

“One of our main objectives has been to create an environment where investments can thrive,” Lokpobiri stated. “Today, I am pleased to announce that our efforts have rekindled investor confidence in the sector.”

He pointed to notable investments, including $5 billion and $10 billion commitments in deepwater offshore assets, and a $1.6 billion investment in oil and gas asset acquisition.

The surge in investments is attributed to a series of roadshows in the United States and Europe, which successfully showcased Nigeria’s potential and the government’s commitment to sectoral reforms.

This renewed global interest is also evident in the ongoing bid rounds for new assets.

Production Increase and Strategic Initiatives

A significant achievement since President Tinubu took office is the increase in crude oil production.

“When we took office, production was at approximately 1.1 million barrels per day, including condensates,” Lokpobiri reported. “Today, I am proud to report that we have increased our production to approximately 1.7 million barrels per day, inclusive of condensates.”

To achieve this increase, the government has undertaken several strategic initiatives.

These include revamping redundant oil assets, continuous engagement with international oil companies, and resolving industry disputes.

Efforts to protect critical assets and reduce oil theft have also been intensified, with collaborations between private security firms and government agencies leading to a sharp decline in crude oil theft.

Upcoming $20bn Expansion Deal

In addition to the recent investments, Lokpobiri revealed that the Federal Government is on the verge of finalizing a $20 billion deal aimed at further boosting oil and gas production.

During a meeting with Olivier Le Peuch, CEO of Schlumberger Limited, Lokpobiri disclosed that negotiations with major investors are nearing completion. “Investments of over $20 billion are coming. One company alone will invest $10 billion,” he noted.

This deal, once consummated, will represent one of the largest single investments in Nigeria’s oil sector in recent history, promising to significantly enhance the country’s production capacity and economic growth.

Ongoing and Future Projects

Lokpobiri also highlighted the commencement of production from Oil Mining Leases (OMLs) 13 and 85, managed by Sterling Exploration and First E&P respectively.

These projects are expected to produce an average of 20,000 and 40,000 barrels per day, further bolstering Nigeria’s output.

This period of renewed investment and increased production is a testament to the government’s commitment to optimizing the nation’s oil and gas assets.

President Tinubu’s administration aims to sustain this momentum, ensuring continued growth and stability in the sector.

Government Transparency and Accountability

In line with President Tinubu’s directive for transparency, all ministers have been tasked with presenting their performance reports to the public.

The Minister of Information and National Orientation, Mohammed Idris, announced that the first-anniversary celebrations will include sectoral media briefings by the 47 federal ministers, starting on Thursday.

These briefings are designed to keep Nigerians informed about the government’s achievements and ongoing initiatives.

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Energy

Oil Prices Stable Amid Federal Reserve’s Talk of Interest Rate Tightening

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In a landscape where global oil markets often sway with the slightest economic shifts, stability can be a rare commodity.

However, amidst discussions from the U.S. Federal Reserve regarding potential interest rate adjustments, oil prices have remained surprisingly steady.

Brent crude oil, against which Nigerian oil is priced, gained 10 cents, or 0.1% rise to $82.00 a barrel, while U.S. West Texas Intermediate (WTI) crude oil edged up 7 cents to $77.64 a barrel.

The Federal Reserve’s release of minutes from its recent policy meeting unveiled deliberations on the possibility of raising interest rates to combat persistent inflationary pressures.

The minutes stated, “Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.”

Such discussions surrounding interest rates can have a profound impact on oil demand. Higher interest rates typically result in increased borrowing costs, potentially constraining funds that could otherwise stimulate economic growth and, consequently, oil consumption—particularly in the United States, the world’s largest oil-consuming nation.

Additionally, the Energy Information Administration’s report indicating a 1.8 million barrel rise in U.S. crude stocks last week, as opposed to an anticipated draw of 2.5 million barrels, added a layer of complexity to the market dynamics.

This unexpected increase in inventory weighed on market sentiment, despite ongoing efforts to balance supply and demand.

Furthermore, global physical crude markets have been grappling with subdued refinery demand and abundant supply, exacerbating the pressure on oil prices.

Analysts from Citi highlighted recent market softness, attributing it to weaker data encompassing rising oil inventories, tepid demand, and refinery margin weakness, compounded by the looming risk of production cuts.

Russia’s announcement that it surpassed its OPEC+ production quota in April due to “technical reasons” added another dimension to the market narrative.

The Russian Energy Ministry revealed plans to present a compensation strategy to the Organization of the Petroleum Exporting Countries (OPEC) Secretariat shortly.

Against this backdrop, anticipation mounts ahead of the OPEC+ meeting scheduled for June 1, where crucial decisions regarding production cut levels will be deliberated.

Despite uncertainties surrounding the meeting’s outcome, industry experts foresee challenges in significantly tightening the market in the near term, potentially leading to a rollover of existing voluntary cuts.

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Electricity Subsidy Surges to N628.61bn in 2023, Discos Earn N1.08tn

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Amidst ongoing debates regarding Nigeria’s power sector and the financial dynamics surrounding it, the latest data from the Nigerian Electricity Regulatory Commission (NERC) has revealed significant figures concerning electricity subsidy and the earnings of power distribution companies (Discos).

According to the data obtained from NERC, the Federal Government’s expenditure on electricity subsidy soared to a staggering N628.61 billion in 2023.

This substantial subsidy expenditure indicates the government’s continued financial support to ensure electricity affordability for consumers across the nation.

Simultaneously, power distribution companies amassed a total revenue of N1.08 trillion during the same period.

This substantial revenue underscores the financial capacity of the Discos despite ongoing challenges within the power sector, including issues related to infrastructure, metering, and service delivery.

Analysis of the figures provided by NERC reveals a consistent increase in electricity subsidies throughout 2023.

In the first, second, third, and fourth quarters of the year, subsidies on power amounted to N36.02 billion, N135.23 billion, N204.6 billion, and N252.76 billion, respectively.

This steady rise in subsidy expenditure reflects the government’s commitment to bridging the gap between the cost-reflective tariff and the allowed tariff.

Conversely, power distribution companies witnessed notable revenue growth over the same period.

Despite concerns raised by consumers regarding service quality and reliability, Discos reported earnings of N247.09 billion, N267.86 billion, N267.61 billion, and N294.95 billion in the first, second, third, and fourth quarters of 2023, respectively.

This substantial revenue generation highlights the financial viability of the Discos within the current regulatory framework.

The surge in revenue by Discos has prompted calls from various stakeholders for improved service delivery and accountability within the power sector.

Consumers have expressed dissatisfaction with the quality of service provided by Discos, emphasizing the need for enhanced operational efficiency and infrastructure investment to address prevailing challenges.

In the absence of cost-reflective tariffs, the Federal Government continues to bear the burden of electricity subsidies to ensure affordability for consumers.

These subsidies primarily target power generation costs payable by Discos to the Nigerian Bulk Electricity Trading company, thereby supporting electricity generation and supply across the country.

Commenting on the subsidy expenditure for the fourth quarter of 2023, NERC highlighted the government’s policy to harmonize exchange rates and maintain end-user customer tariffs at approved rates.

This policy direction contributed to the increase in subsidy obligations, reflecting the government’s efforts to stabilize electricity prices amidst economic uncertainties.

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