Tag Archives: Price

Oil prices rise after ‘over 90% compliance’ to OPEC deal

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Oil prices rose by more than one dollar a barrel on Tuesday, after the Organisation of Petroleum Exporting Countries (OPEC) announced that over 90% of OPEC countries were conforming to the oil deal.

Members and non members of the organisation agreed to cut production in December 2016.

Brent crude futures, the international benchmark for oil prices, traded at $57.20 per barrel, recording an increase of $1.13 from its last closing price.

In 2016, oil prices traded as low as $27 per barrel and began to rise towards the end of 2016.

While speaking at the 201 International Petroleum (IP) week, Mohammed Barkindo, secretary-general of OPEC, said that over 90% of member states were conforming to the oil deal.

“In OPEC’s most recent monthly oil market report the production data for January shows conformity from participating OPEC nations above 90%,” Barkindo said.

“Moreover, all countries involved remain resolute in the determination to achieve a higher level of conformity. We are also determined to realise the joint conference decision to strengthen and sustain this cooperation between OPEC and non-OPEC.

“We want this to be a lasting and flexible partnership that when necessary can help reduce volatility, provide more confidence to the market, and steer a path towards more sustainable stability.

“All countries involved remain resolute in the determination to achieve a higher level of conformity.”

 

Source: The Cable

FG will NOT increase pump price of petrol, says NNPC

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The Nigerian National Petroleum Corporation (NNPC) has advised Nigerians not to engage in any panic buying of petroleum products.

Ndu Ughamadu, spokesman of the corporation, issued a statement late Wednesday to dismiss the report of a likely increase in the price of the products.

He said the corporation had a 1.3billion litres stock of premium motor spirit (PMS), otherwise called petrol, which is sufficient to serve the nation for more than 38 days.

“This plea comes on the heels of reports that some motorists have begun panic buying of petrol, following rumours that the government is about to increase the pump price of the white product from N145 per litre,” the statement read.

“NNPC wishes to assure Nigerians that there is no iota of truth in the rumour that government is scheduled to adjust pump price of petrol.

“Indeed, with the resumption of production by the Corporation’s three refineries in Kaduna, Port Harcourt and Warri, complemented by imports, there is enough stock of PMS, automotive gas oil (AGO), diesel and kerosene.”

Ughamadu said Anibor Kragha, NNPC’s chief operating officer of the refineries, explained the state of refineries to lawmakers when he appeared before the senate on Wednesday.

“Mr. Anibor Kragha briefed the senate committee on petroleum downstream in a presentation on the current status of the refineries at the National Assembly Complex in Abuja,” he said.

“In the presentation, Kragha told the legislators that the nation’s three refineries produced additional volumes of 4.6 million litres of kerosene and 7.7 million litres of diesel, in addition to millions of litres of petrol being refined daily at the nation’s refineries.

“The assurances of availability of stock by the NNPC Chief Operation Officer of the Refineries yesterday still stand.”

 

Source: The Cable

GUARDIAN: Petrol price template crumbles as PPPRA is in disarray.

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The Petroleum Products Pricing Regulatory Agency (PPPRA), which controls the cost of petrol in the country, is in disarray and this is disrupting the implementation of the existing pricing template.

The Guardian learnt in Abuja yesterday that the disruption in the system is caused by a lack of mechanism for a quarterly price adjustment, absence of a board and failure by government to appoint a substantive executive secretary. It was learnt that these factors have contributed more to the collapse of the pricing template than the lack of forex for fuel imports. The current open market price of petrol is above the N145 per litre.

The rising cost of crude oil in the international market has renewed pressure on government to increase the pump price as subsidy is staging a gradual comeback. The Nigeria National Petroleum Corporation (NNPC) has almost become the last resort in the supply chain following the inability of independent marketers to access foreign exchange for fuel imports.

The General Secretary of the Nigeria Labour Congress (NLC), Dr. Peter Ozo-Eson, said a lack of a properly instituted modulation scheme would continually lead to price increase.

“Any modulation scheme that is based on import will always lead to consistent price increment,” he said, urging government to build fund from crude oil savings to ensure that modulation is done.

He said the Ibrahim Mantu committee indeed recommended the modulation scheme in 2005 and how it should be operated but that the Olusegun Obasanjo government opted for Petroleum Support Fund.

While a board has been announced for the agency, it is yet to be inaugurated which has made the review of petrol price modulation for the sector impossible.

This has also rendered the Acting Executive Secretary of the Agency, Victor Shidok confused as he has not appointed a substantive general manager, operations, because he is not sure whether he will return to the position or not.

This development has led Mr. Olasupo Agbaje to combine both Operations and Corporate Services Departments, which is seen as detrimental to the functionality of the organisation.

The Chairman, Petroleum Downstream Sector, Ken Abazie, said though PPPRA may not have released another guide for the industry, the available template, which was released in May last year, had made provision for variance and movement that may affect petrol price.

According to Abazie, the current template for petrol would still allow marketers to import and make profit. “But if marketers continue to get forex either from the parallel market or black market, the price of petrol may soon be above the common man,” he added.

The Executive Secretary of Major Oil Marketers Association, Thomas Olawore, said that many marketers were no longer working on the template as they had stopped the importation of petroleum product for a long time.

“What we do now is to rely on NNPC for product due to the high cost of sourcing foreign exchange. It is true there is a major difference between the landing cost of petrol and the regulated price; we don’t know how NNPC is coping with the difference. For now, we depend on NNPC,” he said.

The NNPC yesterday said its Port Harcourt, Warri and Kaduna refineries were expected to pump about 5.3 million litres of kerosene into the market as the three refineries resumed operations.

In an exclusive interview with The Guardian in Abuja, the Managing Director of the Nigerian Product Marketing Company (NPMC), Farouk Ahmed, said the Warri and Port Harcourt refineries had resumed production while Kaduna refinery was also expected to come on stream.

“Port Harcourt refinery is producing between 2.2 and 2.3 million litres per day, Warri is also producing the same while Kaduna is producing 700,000 litres per day,” he said.

Confirming the resumption, the Group General Manager, Group Public Affairs Division of the NNPC, Ndu Ngamadu, in a statement quoted the Managing Director of the Warri Refining and Petrochemical Company (WRPC), Solomon Ladenegan, as saying Warri Refinery had been doing well since the Crude Distillation Unit (CDU) was revved up last Saturday.

According to him, the plant now refines two million litres of kerosene and three million litres of diesel daily.

“This morning, we have pumped the products to PPMC and they have started loading. They are going to load up to one million litres of DPK and AGO. The products are there in the tank and we are doing everything to get them to the market,” Ladenegan disclosed.

Also, the Managing Director of the Paort Harcourt Refining Company (PHRC), Dr. Bafred Enjugu, said Port Harcourt Refinery was producing three million litres of AGO daily, in addition to millions of DPK being churned out by the refinery daily.

While the question of potential scarcity rages, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), which began a three-day warning, strike called it off the same day.

At the end of the emergency National Executive Council (NEC) meeting in Abuja on Tuesday, the President of NUPENG, Igwe Achese, said the warning strike was intended to draw government attention to the massive termination of appointments of workers in the oil and gas sector as a result of divestment of assets and disobedience to labour laws by International Oil Companies (IOCs).

 

Source: Guardian

Oil prices rise ahead of meeting of OPEC and non-OPEC producers

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Oil prices extended gains on Friday on optimism that non-OPEC producers would agree to cut output following a cartel agreement to limit production.

 

The Organization of Petroleum Exporting Countries (OPEC) will meet non-OPEC nations in Vienna on Saturday to seek their help in curbing a global supply glut.

 

Azerbaijan already said it would come to the Austrian capital armed with proposals for its own reduction.

 

Brent sweet crude for February delivery was up 17 cents at $54.06 a barrel after settling up 1.7 per cent on Thursday.

 

The contract hit its highest since July 2015 at $55.33 on Monday.

 

NYMEX crude for January delivery was up 33 cents at $51.17 a barrel.

 

Russia has said it would cut 300,000 barrels per day, meaning other non-OPEC producers combined would need to pledge the same amount to lower output by the 600,000 bpd.

NCC Explains Proposal, Reversal Of Plans To Hike Data Price

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The Nigerian Communications Commission on Wednesday announced the immediate suspension of the new minimum pricing template for data services by mobile operators in the country.

The director, Public Affairs at the NCC, Tony Ojobo, said the decision to rescind its earlier directive to telecom operators to commence charging the new floor price rate for data from December 1, was to allow for further consultation with industry interest groups.

“Following concerns that visited the directive to introduce price floor for data segment of the telecommunications sector beginning from December 1, 2016, the Nigerian Communications Commission (NCC) has suspended any further action in that direction,” Mr. Ojobo said in a statement.

“The decision to suspend this directive was taken after due consultation with industry stakeholders and the general complaints by consumers across the country.”

Mr. Ojobo said the Commission has already asked all operators to maintain the status quo until the conclusion of study to determine retail prices for broadband and data services in the country.

Prior to the suspension, Nigerians had raised concerns about the impropriety of the decision by government to hike price of data at this time.

Several Nigerians accused the NCC of insensitivity, considering the high cost of living in the face of the current economic recession in the country.

Social media users expressed fears the government planned to limit citizens’ access to the Internet.

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http://www.premiumtimesng.com/business/business-data/216752-proposed-reversed-plans-hike-data-price-ncc.html

The Nigeria Data Pricing War – by Yemi Ade-John

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The overriding principle should be that lower prices are good for the consumer and if their is underpricing or cartel price fixing there are methods for punishing that behavior all the while ensuring that costs of fines for example are not passed on to consumers.

All today’s big operators were once small operators and they did fine. Etisalat came in last and is doing fine and we haven’t heard that NITEL is complaining

How many operators make up a monopoly or oligopoly and how many more do we need to get this vaunted ‘perfect’ market?

Is the CDMA platform efficient or more beneficial,why is it being protected and who says they won’t engage in anticompetitive practices themselves just like the big GSM ones have E been doing presumably for years unchecked till now? So are we now being encouraged to migrate to CDMA operators with their limited geographical spread?

What heaven dictated business model did the regulator use to determine that under-pricing was taking place?

I have never heard of a regulator anywhere dictating prices to go upwards on its own initiative for over 80% of the consumer base in an industry;its normally the other way with the operators persuading a reluctant regulator on the need to be allowed to effect increases-in areal democratic society that this sort of regulatory behavior would result in heads rolling!

Kachikwu: We’d review our current template before any fuel price increase

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Ibe Kachikwu, minister of state for petroleum resources, says the federal government would review its current pricing template before it can implement any increase in fuel price.

The minister explained that some of the elements of the pricing template still lies within the government’s control, and can be amended to keep retail prices within its current band.

Speaking in Abuja over the weekend, Kachikwu said he was not aware that Nigerian National Petroleum Corporation (NNPC) mega-stations had increased their pump price of petrol to N145 per litre, from N141.

“First, I am not aware that the NNPC has increased its price. I need to look into that, it’s a bit of surprise for me, because there are processes in doing this,” he said.

“If they have done that, it means they are doing it wrongly. Let me find out what the facts are. Having said that, the reality is that what we did at the point where we did some liberalisation was to enable the market float the price.

“Obviously, as you look at foreign exchange differentiations and all that, it would impact the landing cost of petrol.

“The worst thing you could do is to go back to the era where we basically were fixing prices. What we ought to be doing is watching prices, making sure that they are not taking advantage of the common man.”

Currently, NPA, NIMASA charge N1.06 on every litre of petrol coming into Nigeria, but Kachikwu suggested that the government would rather cut its own charges in the template first, before embarking on any increase.

“One of the things I think we had hoped to do, which we should still do before we embark on any price increase is to work on those templates. There are still areas that are within government control.

“These are payments to the Ministry of Transport and the rest, payments to the Nigerian Ports Authority (NPA) that are foreign-currency denominated.

“We are working on the possibility of being able to shift that out so that you still can modulate the prices within where it is right now. But I would hold a conversation with the industry and see how it is going.”

“At the end of the day, I think PPPRA is the agency that has the authority to say it is time the templates does justify some level of movement, otherwise you have a crisis of individual decisions on pricing.”

Rice Price’ll Fall By November — FG

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The Federal Government on Monday declared that the price of rice would start to fall from November this year.

It stated that more Nigerians had returned to their various farms, adding that at the next harvesting season next month, the price of rice would start to crash.

This came as the government said that the delay in the approval of the 2016 budget had made it impossible to implement the capital expenditure in the agricultural sector.

The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, said this while addressing members of the Senate Committee on Agriculture and Rural Development at the headquarters of the ministry in Abuja.

Ogbeh, who stated that the government could not be involved in the importation of rice as speculated in some quarters, stressed that his ministry would not encourage rice importation because it would be detrimental to local production.

He said the Federal Government was against rice smuggling and noted that the Seme border had become a notorious route for the smuggling of contraband products into the country.

“We will not encourage rice importation and there is no way our ministry or government can be involved in importing rice when we are working hard to be self-sufficient in local production. By November when the full-scale harvest starts, rice prices will fall,” the minister said.

Early last month, the government had warned that the price of rice might hit N40,000 a bag. It is currently being sold around N20,000.

The Minister of State for Agriculture and Rural Development, Senator Heineken Lokpobiri, said that the $22bn annual food import bill had led to the astronomical rise in the price of rice and other commodities.

He stressed that if Nigerians failed to produce some of the items being imported before December, the price of rice could skyrocket to N40,000 a bag.

On why the ministry had yet to start implementing its capital budget, Ogbeh said, “It is about now that the capital expenditure is beginning. One of the reasons why money is not circulating is that we need to follow the due process on issues of procurement, advertisement and others.”

According to him, his ministry has spent just N882.58m, representing four per cent of the N21bn budgeted for it in the 2016 Appropriation Act.

He also said, “You may be surprised to know that only six to seven states in Nigeria are showing enthusiasm in agriculture. Some by nature don’t seem interested, while others just can’t connect with whatever we are doing at the federal level.”

Ogbeh further stated that his ministry inherited N67bn debt when the present administration came on board, but added that N20bn had been paid to agro-dealers and distributed 900 million oil palm seedlings to farmers across the country.

Hike in petrol price inevitable – IPMAN

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The speculation about possible increase in price of Premium Motor Spirit, PMS, otherwise known as petrol, may hold some water as the Independent Petroleum Marketers Association of Nigeria, IPMAN, yesterday warned of a threat to product availability in the country.

This came as expert blamed marketers of insensitivity to price moderation when government placed a cap on petrol price in May.

But, other operators have argued that the price of petrol was driven by economic variables, which could not be altered for a long time due to foreign exchange challenges.

Speaking, National President, IPMAN, Mr. Chinedu Okoronkwo, said: “But I will advice for total deregulation. The price moderation, which is the cap placed is not healthy for the petroleum industry to grow.

“There are people who have the forex to bring product and sell. By so doing, forexwill crash. But when the industry is over-protected like ours, the current challenges will be unending. Market force should drive the price.

“If the refineries are working to a capacity of 70 percent, the product will not be more than N130 per litre. We should focus on making the refineries work because by the time you keep on importing, forex challenges will keep on recurring and there would no head way.

FUEL-Price-changeFUEL-Price-change“The Nigeria National Petroleum Corporation, NNPC, should ensure that the refineries are working and government should grant all support needed to ensure that they work, so the country can avert all of the turbulence hitting the petroleum sector as well as the economy.

“The best way to do that is for the government to hands off, and sometime coming in to intervene when the need arises.”

He, however, urged the Federal Government to urgently encourage the setting up of modular refineries in the country as a spur for the refining of crude product.

“The government should encourage the installation of modular refineries in virtually all local government. For example, Ivory Coast has one refinery which is old and yet it is working and giving them the satisfaction to an extent,’’ he added.

He noted that the association planned to invest on building a modular refinery to assist refining of the product.

“We had brought some investors to Nigeria. In Kogi, we had been given land to build a modular refinery,” he said.

He further called for a good policy in the sector to drive the needed investment for growth.

Okonkwo said: “The body language of the government must be seen. An enabling environment should be guaranteed and encouraged for investors to harness.”

Meanwhile, a renowned Petroleum Economist and President, Nigerian Association for Energy Economics, NAEE, Professor Wumi Iledare, has blamed marketers for misunderstanding the intentions of government when it hiked the price of petrol in May.

He said: “The concept of fixing a price at N145 per litre introduced by government in May this years was actually suppose to be a ‘price feeling’ and not ‘price floor.’’

Cement Price Rises By 44 Per Cent, Hits N2,300 Per Bag

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Dreams of lower construction costs by prospective homeowners might have become a nightmare, going by fresh increase in the price of cement products by manufacturers.

The development has already triggered a ripple effect in the open market, with prices going up by about 44 per cent in few days.

Investigations revealed that operators under the Cement Manufacturers Association of Nigeria (CMAN) have raised prices of brands by N600 per bag in factories, including additional N100 cost for haulage. This has increased retail prices from N1,600 to N2,300 depending on location. In some areas, prices have shot up to N21,350 or higher.Members of the CMAN include Dangote Cement Plc, which is emerging as a market leader and has factories in Gboko, Benue State; Obajana, Kogi State; and Ibeshe, Ogun State.

Other are: Lafarge Cement WAPCO Plc; Cement Company of Northern Nigeria Plc; Ashakacem Plc and Cross-River based United Cement Company.

Vice President, Nigerian Institute of Building, Kunle Awobodu, said: “This is going to create crisis in the construction sector and bad blood between clients and contractors, as developers will make claims for fluctuations.

“Invariably, it will lead to upward reviews of contract sums. New and on-going projects will be delayed until there is agreement on the contract variations. It can also expedite construction activities because of the anticipation of further increase.”

According to an official in one of the cement manufacturing companies, the hike is not unconnected to difficult operating environment.

Read More:

http://guardian.ng/news/cement-price-rises-by-44-per-cent-hits-n2300-per-bag/

FG Will Modulate Petrol Price Not Subsidy Removal

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The Nigerian government says contrary to speculations, it is not interested in the removal of subsidy on petroleum products, but rather a price modulation that will reduce its involvement in pricing starting 2016.

The Minister of State for Petroleum, Dr Ibe Kachikwu, briefed reporters of the government’s position on Thursday.

Dr Kachikwu said a periodical review of the Petroleum Pricing Template and a flexible management of the pricing system would be considered.

He said the review would allow marketers to trade freely and reflect prevailing international price of crude.

According to him, the review will be the key focus in the first quarter of the coming year.

He said the 97 Naira per litre projection would be a cap on the price of fuel with a gradual increment between the band of the current price of 87 Naira and 97 Naira until a fair price is reached in the pricing review.

Credit: ChannelsTv