Crude Oil

NLNG Urges President Tinubu to Address Oil Pipeline Sabotage and Taxation Issues

Published

1 month ago

August 24, 2023

The Nigerian Liquified Natural Gas company has reached out to President Tinubu, urging him to take decisive action in addressing the persistent sabotage of oil pipelines and the burdensome issue of multiple taxation that hinder the operations of companies in the country.

During a recent visit to the Presidential Villa in Abuja, the Board of Directors and Management of Nigeria LNG Limited expressed their gratitude to President Bola Ahmed Tinubu for his unwavering support in strengthening Nigeria’s position in the global energy sector.

Edmund Daukoru, the chairman of the NLNG Board, conveyed his appreciation to the President for his backing and emphasized the company’s substantial contributions to the government’s revenue through dividends and taxes. He also highlighted that in 2022, the FIRS recognized NLNG as the largest tax-paying company in the country.

Philip Mshelbila, the MD/CEO of NLNG, underscored the company’s pivotal role in Nigeria’s economy. He emphasized the need for government support in addressing several challenges currently facing NLNG. These challenges include the imposition of multiple taxes by various government agencies and the annual amendments to the Finance Act, which disrupt corporate planning, negatively impacting businesses and undermining investor confidence in the sector.

Mshelbila also pointed out the positive impact of NLNG’s Domestic LPG (DLPG) Scheme, which ensures a stable supply, availability, and affordability of LPG while stimulating the development of various aspects of the DLPG value chain in Nigeria. He noted that 100 percent of the LPG produced by NLNG is dedicated to the domestic market, serving approximately 40 percent of Nigeria’s domestic LPG demand.

In response, President Tinubu expressed his gratitude for NLNG’s visit and commended the company for its unwavering commitment to excellence and its significant contributions to the country’s GDP. He acknowledged the critical role NLNG plays in Nigeria’s economy and emphasized the importance of natural gas as both a transition fuel and the fuel of the future.

President Tinubu assured the NLNG Board that the Gas Sector would be a top priority in his administration. He pledged to swiftly remove any obstacles hindering the progress and development of Nigeria’s industrial sector, particularly in the oil and gas industry.

Furthermore, President Tinubu stressed the importance of engaging all stakeholders in the gas sector value chain, especially host communities, to build trust and confidence. He encouraged NLNG to continue collaborating with the government to address issues efficiently, reiterating his administration’s commitment to ensuring a thriving business environment that fosters economic prosperity and sustainable development.

In summary, NLNG’s call to action highlights the pressing need to address challenges such as pipeline sabotage and multiple taxation, which hinder the growth of businesses in the oil and gas sector. President Tinubu’s commitment to addressing these issues and prioritizing the Gas Sector signifies a positive step toward achieving economic prosperity and sustainable development in Nigeria.

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Crude Oil

Oil Prices Surge as China’s Holiday Demand and Tight US Supply Drive 2% Weekly Gain

Published

3 days ago

September 29, 2023

Samed Olukoya

Oil prices to close the week with about a 2% gain as robust holiday demand from China and constrained U.S. fundamentals overshadowed concerns about potential supply increases from Saudi Arabia.

Brent crude oil, against which Nigerian oil is priced, gained 5 cents to $95.43 per barrel at about 6:00 a.m. Nigerian time on Friday while the U.S. West Texas Intermediate crude (WTI) rose by 16 cents to $91.87 per barrel.

The market’s resilience became evident as it rebounded from a slight 1% dip in the previous session when profit-taking followed a surge in prices to 10-month highs.

China, the world’s largest oil importer, played a pivotal role in driving prices higher. Strong fuel demand coincided with China’s week-long Golden Week holiday, with increased international and domestic travel significantly boosting Chinese oil consumption.

Analysts at ANZ noted that this holiday season’s surge in travel was underpinned by the fact that the average daily flights booked were a fifth higher than during Golden Week in 2019, pre-dating the COVID-19 pandemic.

Also, improving macroeconomic data from China and the steady growth of its factory activity further supported the bullish sentiment.

The U.S. economy’s robust growth and indications of accelerated activity in the current quarter also bolstered expectations of sustained fuel demand.

Also, tight supplies in the U.S., evidenced by dwindling storage levels at Cushing, Oklahoma, provided additional support to oil prices. As rig counts fell, U.S. oil production was expected to slow down, potentially pushing the market into a deficit of more than 2 million barrels per day in the last quarter.

Investors are now eagerly awaiting the upcoming meeting of the Organization of the Petroleum Exporting Countries and allies (OPEC+), scheduled for October 4th.

The meeting will be a crucial indicator of whether Saudi Arabia will consider stepping up its supply in response to the nearly 30% surge in oil prices this quarter.

Analysts, however, caution that the market may be entering overbought territory, leading to possible hesitancy among participants and concerns that OPEC+ could ease production cuts earlier than planned if prices continue to rise.

The outcome of next week’s OPEC meeting will undoubtedly hold significant implications for the oil market’s future trajectory.

Crude Oil

Oil Prices Soar to a Year High as Crude Reserves Plummet

Crude stocks at a pivotal storage hub in Cushing, Oklahoma, hit their lowest levels since July last year, sparking concerns about future supply stability.

Published

4 days ago

September 28, 2023

Investors King

Oil prices surged to their highest level in over a year during Asian trading hours, following a significant drop in crude stocks at a key storage hub.

Crude inventories in Cushing, Oklahoma, plummeted to a mere 22 million barrels in the fourth week of September, close to operational minimums, according to data from the U.S. Energy Information Administration (EIA).

This translates to 943,000 barrels compared to the prior week.

The U.S. West Texas Intermediate (WTI) rose to $95.03 per barrel during Asian trading hours, a peak not seen since August 2022 before settling at $94.61 per barrel.

Meanwhile, Brent crude oil, the international benchmark for Nigerian oil, rose by 1.05% to $97.56 per barrel.

Experts have attributed this rapid price escalation to the precarious situation in Cushing, with Bart Melek, Managing Director of TD Securities, stating, “Today’s price action seems to be Cushing driven, as it reaches a 22 million bbl low, the lowest level since July 2022.”

Melek expressed concerns about the challenges of getting crude oil into the market if inventories continue to dip below these critical levels.

Predicting the future trajectory of oil prices, Melek suggested that prices could remain at elevated levels for the remainder of the year, especially if the global oil cartel, OPEC+, continues to enforce supply restrictions.

He noted that the global oil market is facing a “pretty robust deficit” on top of an already significant shortfall for this quarter due to OPEC’s production cuts.

Saudi Arabia, a key player in OPEC+, has extended its voluntary crude oil production cut of 1 million barrels per day until the year’s end, bringing its crude output to nearly 9 million barrels per day.

Russia has also pledged to continue its 300,000 barrels per day export reduction until December.

However, Melek added that, “We do think that prices could keep up near these levels for quite some time. But I don’t think it’s too permanent. And we might have seen the end of this rally.”

Crude Oil

Nigerian Pump Prices May Increase as Crude Oil Hits $93.55 Per Barrel

Published

6 days ago

September 26, 2023

Investors King

Amidst growing concerns over the surging price of crude oil on the international market, Nigerian citizens are bracing themselves for a possible increase in pump prices.

Crude oil, the lifeblood of Nigeria’s economy rose to $92.42 per barrel on Monday, casting a shadow of uncertainty over the already volatile fuel market.

This surge in crude oil prices comes in tandem with the persistent depreciation of the Naira in foreign exchange markets, where it traded at N980 to $1 on the parallel market. For many Nigerians, these simultaneous developments trigger memories of the recent fuel price hikes that followed the removal of fuel subsidies earlier this year.

In June, the government removed the subsidy, leading to a sharp 210% increase in the pump price from N175 per liter to N546.83 per liter. In a further blow to consumers, less than a month later, the price surged again, reaching N617 per liter.

However, since then, there have been no additional fuel increments, despite fluctuations in the Naira’s exchange rate. President Bola Ahmed Tinubu, along with key government officials and industry leaders, has reiterated their commitment to stabilizing petrol prices in the country.

According to Ajuri Ngelale, Special Adviser to the President on Media and Publicity, “The President affirms that there will be no increase in the price of petroleum motor spirit.”

Mele Kyari, Group Chief Executive of the Nigerian National Petroleum Corporation Limited (NNPC), echoed this sentiment, emphasizing that NNPC is the sole supplier of petrol nationwide and has not proposed any price hikes.

Industry experts like Chinedu Okonkwo, President of the Independent Marketers Association of Nigeria (IPMAN), have urged the government to expedite efforts in implementing Compressed Natural Gas (CNG) as a viable alternative to traditional fuels, providing a long-term solution to the country’s energy needs.

While the global crude oil price surge is a cause for concern, Nigerians are holding onto the government’s commitment to price stability and the potential for CNG to provide a sustainable energy alternative in the future.

In a market with unique dynamics, where NNPC remains the sole supplier and importer of fuel, the hope is that prices will remain stable for the benefit of all Nigerians.