Petrol Landing Cost Jumps to N186, Oil Hits $64
Against the backdrop of the rising price of oil prices, the landing cost of Premium Motor Spirit (petrol) imported into Nigeria has increased to N186.33 per litre.
Investors King had exclusively reported on February 9 that the landing cost of PMS rose to about N180 per litre on February 5 from N158.53 per litre on January 7.
Crude oil price accounts for a large chunk of the final cost of petrol, and the deregulation of petrol price by the Federal Government last year means that the pump price of the product will reflect changes in the international oil market.
Going by the petrol pricing template of the Petroleum Products Pricing Regulatory Agency, the landing cost of petrol rose to N186.33 per litre on February 16, with the pump price of the product expected to be N209.33 per litre.
The international oil benchmark, Brent crude, closed at $63.96 per barrel on February 16, up from $59.34 per barrel on February 5.
The rising price of crude oil pushed the cost of petrol quoted on Platts to $560.75 per metric tonne (N163.08 per litre, using N390/$1) on February 16 from $543.25 per metric tonne (N157.99 per litre) on February 5.
Other cost elements that make up the landing cost include freight (N10.29), lightering expenses (N4.57), insurance cost (N0.25), Nigerian Ports Authority charge (N2.38), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N1.33).
The freight cost increased to $35.41 per MT (N10.29 per litre) last Wednesday from $30.04 per MT (N8.74 per litre) on February 5.
The pump price is the sum of the landing cost, wholesale margin and the distribution margins. The wholesale margin is N4.03 while the distribution margins comprise transporters allowance (N3.89), retailer (N6.19), bridging fund (N7.51), marine transport average (N0.15), and admin charge (N1.23).
Apart from the changes in global crude oil prices, the exchange rate of naira to the dollar also affects the cost of imported petrol.
The cost of petrol would be higher if the 410/$1 rate at which the naira closed on Monday at the Investors’ and Exporters’ Foreign Exchange Window was used. The naira closed at 480/$1 at the parallel market.
The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.
Oil marketers said recently that they were ready to resume importation of petrol if the foreign exchange was made available to them at a competitive rate.
“The discussion we should be having today is how best to maximise the benefits of the removal of price controls and subsidies while minimising the adverse effects of this action on our citizens,” the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, said at a virtual press briefing.
Brent crude, against which Nigeria’s oil is priced, rose by $1.67 to $64.58 per barrel as of 6:08pm Nigerian time on Monday.
Cuba’s Central Bank Suspends US Dollar Deposits Nationwide
Cuba, the island country located where the Caribbean Sea, Gulf of Mexico, and the Atlantic Ocean meet, said this week U.S. dollars will be suspended in the country.
The mandate comes from the country’s central bank and foreign tourists have been told to leave U.S. dollars at home when visiting. The announcement was invoked at a roundtable discussion that was aired on state-sponsored Cuban television.
“In view of the obstacles that the U.S. embargo creates for the national bank system to deposit abroad the U.S. dollars that are collected in the country, a decision was made to temporarily suspend deposits in U.S. banknotes in Cuba’s bank and financial system,” the Central Bank of Cuba (Banco Central de Cuba, BCC) members said.
Yamilé Berra Cires, the vice president of the BCC, explained during the roundtable discussion that at the beginning of the Trump administration’s leadership, the U.S. tightened the embargo’s grip. The United States has had an embargo with Cuba since 1958 and the U.S. has had numerous issues with Cuba during the Eisenhower presidency and Kennedy presidency as well. After the 2008 crisis, the U.S. and Cuba seemed to gravitate toward friendlier terms during the Obama presidency.
However, BCC vice president Berra Cires claims issues have gotten worse since Trump and said 24 foreign banks stopped dealing with Cuba. Berra Cires also said during the roundtable discussion that 95 foreign financial institutions reported on the transgressions of Cuban national banks doing business with counterparties. “It is ever more difficult for Cuba to find international banking or financing institutions willing to receive, convert or process U.S. currency in cash,” Berra Cires further remarked.
“People who will be coming into the country during this time will have to arrive with a currency other than the dollar,” Francisco Mayobre Lence the BCC’s first vice president said.
Of course, after hearing about the USD ban in Cuba, members of the cryptocurrency community wanted Cuba to adopt digital currencies like El Salvador recently did with bitcoin. “It’s like [a] 50-year embargo. It’s really depressing,” one individual wrote about the Cuba situation with America on Reddit. “Will they take crypto now?” another Redditor asked in the r/cryptocurrency thread. Another crypto enthusiast responded to the question and said:
I doubt they want to be the last Latin American country to do so.
Minister-president of the Cuban central bank, Marta Sabina Wilson González explained during the roundtable discussion that Cuba had no choice but to make the decision. “We had no choice but to take this measure, which we are explaining at the Round Table, as we always do when it is a measure that affects the people, who will understand that there is no other option,” the minister detailed.
Kenya Receives $750 Million Loan from World Bank to Boost Economic Recovery
Kenya has received a $750 million loan from the World Bank to support its budget and help the East African economy recover from the effects of the COVID-19 pandemic, the multilateral lender said on Friday.
The Kenyan government has been pushing hard to secure foreign funding to fill a wide budget deficit before its financial year closes at the end of this month.
The $750 million disbursement is part of World Bank’s Development Policy Operations (DPO), which lends cash for budget support instead of financing specific projects.
The bank said some of the funds would go towards setting up an electronic procurement system for government goods and services to improve transparency.
The World Bank said the concessional loan will have a 3.1% annual interest rate. Typically, World Bank loans have zero or very low interest rates and have repayment periods of 25 to 40 years, with a five- or 10-year grace period.
On Thursday, Finance Minister Ukur Yatani presented to parliament the 2021/22 budget, with a deficit of 7.5% of gross domestic product, reduced from 8.7% for the current fiscal year ending this month.
The finance ministry forecasts a economic growth of 6.6% this year, recovering from 0.6% in 2020 when sectors like tourism and related services collapsed due to restrictions imposed to curb the spread of COVID-19.
The World Bank forecasts Kenya’s economy will grow 4.5% this year, and 4.7% in 2022.
President Uhuru Kenyatta, who took the helm in 2013, has overseen a jump in public borrowing. Total debt stands at 70% of GDP, up from about 45% when he took over – a surge that some politicians and economists say is saddling future generations with too much debt.
The government has defended the increased borrowing, saying the country must invest in its infrastructure, including roads and railways.
FG Spends N612.7 Billion on Domestic Debt Servicing in Q1 2021
The latest report from the Debt Management Office (DMO) has revealed that the Federal Government spent a total sum of N612.71 billion on domestic debt servicing in the first quarter (Q1) of 2021.
In the report released on Wednesday, the DMO said the Federal Government paid holders of mature Nigerian Treasury Bills (NTB) N17.23 billion in January, N12.3 billion in February and N5.49 billion in March 2021. Indicating that the Federal Government paid a combined sum of N35.03 billion to NTB holders in Q1 2021.
Similarly, the Federal Government paid N537.783 billion to holders of Federal Government of Nigeria bonds in three instalments of N201.95 billion in January, N79.26 billion in February and N256.58 billion in March 2021.
The Federal Government also paid N308.38 million in three tranches to subscribers of mature FGN Savings Bond. FG paid N111.65 million in January, N97.074 million in February and N99.65 million in March 2021.
Another N8.16 billion was used to settle FGN Sukuk Rentals in March 2021. No payment was made in January and February 2021.
The Federal Government released N31.44 billion as principal repayment “in respect of promissory notes during the quarter under review.
A monthly breakdown revealed that a total sum of N219.29 billion was released to service domestic debts in January, N123.09 billion in February and N270.33 billion in March. Therefore, bringing the total amount spent on domestic debt servicing in the first quarter of 2021 to N612.71 billion.
Nigeria’s total debt rose to N33.1 trillion in the first quarter of 2021, according to the report released by the DMO.
Business3 weeks ago
End Of The Road For Internet Explorer As Microsoft Pulls The Plug
Cryptocurrency4 weeks ago
National Bank of Egypt Joins Ripple Network for Cross-Border Payments
Cryptocurrency4 weeks ago
Ethereum CEO Vitalik Burns $6.6B Worth of Shiba Inu Tokens
Cryptocurrency3 weeks ago
Can cryptocurrency survive regulators? Here’s what Ripple CEO says about XRP’s future
News4 weeks ago
Akeredolu Replies Malami, Open Grazing Ban in South Is Irreversible
Telecommunications3 weeks ago
Nigerians To Submit Phone IDs In Three Months says NCC
Ethereum3 weeks ago
Ethereum Closes In on Long-Sought Fix to Cut Energy Use Over 99%
Cryptocurrency3 weeks ago
BankDhofar Launches Mobile Banking Payments from Oman to India with RippleNet