The rise in crude oil prices coupled with the challenge of difficult access to foreign exchange is bound to reduce petrol imports into Nigeria by marketers.
The gradual rise in crude oil prices and the challenge in the foreign exchange markets do not go down well with marketers of Premium Motor Spirit, popularly known as petrol. They are worried that the development may erode the gains from the partial deregulation of the downstream oil sector.
According to them, the increase in crude prices and the high exchange rate of the United States dollar at the parallel market have almost wiped out the incentive to be enjoyed whenever they import petrol.
On May 11, 2016 when the Federal Government partially deregulated the downstream oil sector by increasing petrol prices from N86 and N86.5 per litre to between N135 and N145 per litre, the cost of crude oil in the international market was about $44 per barrel.
Around that period, the total cost of petrol, according to the May 11, 2016 official pricing template of the Petroleum Products Pricing Regulatory Agency, was N138.11 per litre, leaving a profit margin of N6.89 per litre for marketers.
But on Saturday, May 21, 2016, the price of crude oil rose to $47.17 per barrel, and had risen to over $48 per barrel a few days earlier.
In its updated template that was posted on Friday, the PPPRA stated that the total cost for PMS had risen to N140.01 per litre, hence, leaving a profit margin of N4.99 per litre for the marketers.
The PPPRA, which is the agency of the Federal Government in charge of fixing petroleum products’ prices, updates its PMS pricing template in accordance with the fluctuations in the global prices of crude oil.
“If you say the upper limit is N145 and I know that my total cost will be around N140, will there be any need for me to bother myself importing the PMS? Definitely there is no way I’ll do that because I won’t be able to recover my cost, and if a businessman cannot recover his cost, then there is no point going into that business,” an executive member of the Reconciliation Committee of the Independent Petroleum Marketers Association of Nigeria, Mr. Dibu Aderibigbe, stated.
He noted that marketers were faced with other operational costs, stressing that it would make no business sense to import petrol if the constraints of accessing forex were not cleared, considering the fact that crude prices were beginning to rise.
Aderibigbe said, “The funniest thing is that when the PPPRA was putting together the template, it seemed to have based the cost of dollar on N285 when sourced at the parallel market, as was stated by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, when he appeared on the TV to explain how they arrived at the N145 per litre price.
“However, I don’t know if anyone can get the US dollar at that rate at the parallel market. The black market rate that we know is over N320 to a dollar. So, if they now base their calculation on N285, it therefore means that there is a problem already from the beginning.”
On the increase in crude prices, the IPMAN official advised the PPPRA to review its template and petrol price every fortnight.
“From $44 to around $46 or $47 is no mean change. The $2 or $3 increase cannot be overlooked. So, if you say you will be reviewing the price every month, then you might be making a mistake. To make the regime work very well, you must be ready to review the price of the PMS within an interval of two weeks, at most,” Aderibigbe added.
Also speaking on the recent petrol price policy, the Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore, said marketers had always canvassed a fully deregulated downstream oil sector as a result of the challenges they faced with accessing forex and other operational matters.
According to him, market forces like issues of accessing forex, fluctuation in crude oil prices and rising importation cost should be allowed to determine the cost of petrol as obtained in a truly deregulated sector, adding that this would engender competition among marketers.
Although Olawore commended the Federal Government for partially deregulating the downstream segment of the oil industry, he maintained that marketers would prefer a fully deregulated sector.
The MOMAN secretary, however, noted that the current petrol price regime was a sign that the sector might be fully deregulated in the near future.
“What we have now is a step towards deregulation. Deregulation is actually the end point; we are in the process and we will get there. When we get to deregulation, you will have the refining process included. As it is now, we are looking at only the petrol import side,” he said.
A senior official of an oil marketing firm, who spoke on condition of anonymity, told our correspondent that the marketers had met with the Minister of Finance, Mrs. Kemi Adeosun, to seek the Federal Government’s assistance in accessing forex, particularly as the cost of crude oil appreciates.
The official said, “Crude oil prices are beginning to rise, although marginally. This is also due to several production shut-ins in Nigeria, which were caused by attacks on oil installations in the Niger Delta by militants. This rise in crude prices does not favour the PMS importers at the moment because the sector has been liberalised and we don’t get subsidy anymore.
“Accessing forex has been a challenge for long, but the recent gain in crude prices is compounding the challenge for marketers because it is eroding our profit margins, particularly if you source your forex from the parallel market. This was actually one of the many reasons why marketers met the Finance minister recently in Abuja. You know we don’t get subsidy anymore; so, facing stiff challenges like the ones we face now may slow the importation of the PMS by the marketers.”
Olawore stated that the last time oil marketers were paid petrol subsidy was in 2015, adding that all subsidies incurred in 2016 were meant for the Nigerian National Petroleum Corporation.
#EndSARS: Here is the Complete Speech of President Buhari
The Complete Speech of President Muhammadu Buhari
Following the Lekki Massacre, president Muhammadu Buhari delivered the much-awaited speech. However, the speech failed to touch on the massacre or the people affected, infuriating millions of Nigerian youths that have committed so much to the struggle and lost so much.
Below is the complete speech.
It has become necessary for me to address you having heard from many concerned Nigerians and having concluded a meeting with all the Security Chiefs.
As a democratic government, we listened to, and carefully evaluated the five-point demands of the protesters. And, having accepted them, we immediately scrapped SARS, and put measures in place to address the other demands of our youth.
On approving the termination of SARS I already made it clear that it was in line with our commitment to the implementation of extensive Police reforms.
Sadly, the promptness with which we have acted seemed to have been misconstrued as a sign of weakness and twisted by some for their selfish unpatriotic interests.
The result of this is clear to all observers: human lives have been lost; acts of sexual violence have been reported; two major correctional facilities were attacked and convicts freed; public and private properties completely destroyed or vandalised; the sanctity of the Palace of a peace-maker, the Oba of Lagos has been violated. So-called protesters have invaded an International Airport and in the process disrupted the travel plans of fellow Nigerians and our visitors.
All these executed in the name of the ENDSARS protests. I am indeed deeply pained that innocent lives have been lost. These tragedies are uncalled for and unnecessary.
Certainly, there is no way whatsoever to connect these bad acts to legitimate expression of grievance of the youth of our country.
The spreading of deliberate falsehood and misinformation through the social media in particular, that this government is oblivious to the pains and plight of its citizens, is a ploy to mislead the unwary within and outside Nigeria into unfair judgement and disruptive behaviour.
On the contrary, both our deeds and words have shown how committed this administration has been to the well being and welfare of citizens, even with the steadily dwindling revenues, and the added responsibilities and restrictions due to the Coronavirus pandemic.
Government has put in place measures and initiatives principally targeted at youths, women and the most vulnerable groups in our society. These included our broad plan to lift 100 million Nigerians out of poverty in the next 10 years; the creation of N75 billion National Youth Investment Fund to provide opportunities for the youths, and the Micro, Small and Medium Enterprises (MSME) Survival Fund, through which government is:
a. paying 3-months salaries of the staff of 100,000 micro, small- and medium- enterprises
b. paying for the registration of 250,000 businesses at the Corporate Affairs Commission
c. giving a grant of N30,000 to 100,000 artisans
d. guaranteeing market for the products of traders
These are in addition to many other initiatives such as:
e. N-Tech and
No Nigerian Government in the past has methodically and seriously approached poverty-alleviation like we have done.
With regard to the welfare of police personnel, the National Salaries, Income and Wages Commission has been directed to expedite action on the finalization of the new salary structure of members of the Nigeria Police Force.
The emoluments of other paramilitary services are also being reviewed upwards.
In order to underscore the importance of education in preparing youths for the future, this administration has come up with a new salary structure and other incentives for our teachers.
Let me at this point reaffirm the Federal Government’s commitment to preserving the unity of this country.
We will continue to improve good governance and our democratic process, including through sustained engagement.
We shall continue to ensure that liberty and freedom, as well as the fundamental rights of all citizens, are protected.
But remember that government also has the obligation to protect lives and properties, as well as the right of citizens to go about their daily businesses freely and protected from acts of violence.
To our neighbours in particular, and members of the international community, many of whom have expressed concern about the ongoing development in Nigeria, we thank you and urge you all to seek to know all the facts available before taking a position or rushing to judgement and making hasty pronouncements.
In the circumstances, I would like to appeal to protesters to note and take advantage of the various well-thought-out initiatives of this administration designed to make their lives better and more meaningful, and resist the temptation of being used by some subversive elements to cause chaos with the aim of truncating our nascent democracy.
For you to do otherwise will amount to undermining national security and the law and order situation. Under no circumstances will this be tolerated.
I therefore call on our youths to discontinue the street protests and constructively engage government in finding solutions.
Your voice has been heard loud and clear and we are responding.
And I call on all Nigerians to go about their normal businesses, and enjoin security agencies to protect lives and properties of all law-abiding citizens without doing harm to those they are meant to protect.
Let me pay tribute to officers of the Nigeria Police Force who have tragically lost their lives in the line of duty.
I would like to thank those State Governors, traditional and religious leaders who have appealed for calm and restraint.
I also thank youth leaders who have restrained their followers from taking the law into their hands.
This government respects and will continue to respect all the democratic rights and civil liberties of the people, but it will not allow anybody or groups to disrupt the peace of our nation.
Thank you all. God bless the Federal Republic of Nigeria.”
Passport, Visa Trend as Nigerian Youths Look to Move Out En masse Following Disappointing Presidential Speech
Passport and Visa Trend on Twitter Following Disappointing Presidential Speech
Nigerian youths have started looking for a way to exit the country following a disappointing Presidential speech after security operatives opened fire on peaceful protesters on October 20, 2020 at Lekki Toll Gate in Lagos, Nigeria.
The youths, who have been protesting and demanding an end to the now-disbanded Special Anti-Robbery Squad (SARS) unit of the Nigerian Police Force (NPF), had assembled at Lekki Toll Gate on October 20, 2020 to sustain their protest before the commencement of a 24-hour curfew declared by the Governor of Lagos State, Babajide Sanwo-Olu.
However, shortly after they sang the national anthem, they were attacked by security operatives in one of the goriest scenes ever witnessed in the country. Despite calls for prosecution of perpetrators by both international and local civil rights organisations, the Federal Government has denied the occurrence even when Sanwo-Olu had earlier said forces beyond his control had made dark notes of history in the state.
This coupled with President Muhammadu Buhari’s refusal to acknowledge the killings and occurrence in his speech on Thursday, negatively affected the youths that for the first time went all out to demand a change in one voice.
Feeling dejected with the situation and most importantly hopeless about the future, they were forced to start seeking an exit from an uncertain future to a more predictable economy govern by sane people.
Since the failed presidential speech, Passport and Visa have been trending on Twitter as Nigerian youths now shift their focus to traveling out of Nigeria, a nation expected to plunge into the second economic recession in four years in the third quarter under President Muhammadu Buhari.
The inflation rate increased by 13.71 percent in September with the nation’s unemployment rate at 27.1 percent or 21.8 million amid rising economic uncertainties, weak foreign reserves and a currency that has been devalued twice this year.
#EndSARS Protesters Kill as Security Operatives Open Fire at Lekki Toll Gate
Security Operatives Open Fire on #EndSARS Protesters at Lekki Toll Gate
Nigerian security operatives deployed to Lekki Toll Gate following the announcement of a 24-hour curfew by Lagos State Governor, Babajide Sanwo-Olu, opened fire on peaceful protesters on Tuesday, October 20, 2020.
According to numerous accounts of protesters, the army started shooting even before the curfew announced to commence by 9 pm on Tuesday.
Retweet aggressively the world need to see this 🇳🇬✊
Follow for follow then we move 😭💔💔💔#unarmed #Genocide Lekki #BuhariResignNow Nigeria #EndPoliceBrutalityinNigeraNOW #buhariisamurderer #blacktuesday DJ Switch Tinubu IFO OMATA my God WE WILL NEVER FORGET | Jesus |Toll pic.twitter.com/qRsH13D4c3
— #EndSars (@AkacheSucre) October 20, 2020
So even ambulance wasn’t allowed to go help the peaceful protesters that were shot at Lekki#blacktuesday #EndBadGoveranceInNigeria #EndSARS #EndPoliceBrutalityinNigeraNOW #therewasacountry
Dj Switch pic.twitter.com/EBLipg7bEY
— David Young🇳🇬 (@daveyung333) October 20, 2020
— Dr Remi Adekoya (@RemiAdekoya1) October 20, 2020
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