Economy
Panic as queues surface in Abuja
* Depots reportedly hike price to N710/litre
By Francesca Hangeior.
Fresh queues for Premium Motor Spirit, popularly called petrol, surfaced in Abuja, parts of Niger and Nasarawa States on Friday, following the closure of many filling stations operated by independent marketers.
According to reports, dealers closed their retail outlets due to their inability to access petrol as a result of the hike in the ex-depot price of the commodity to N710/litre by private depot owners.
Motorists besieged the few stations that dispensed petrol on Friday, particularly those operated by the Nigerian National Petroleum Company Limited and some major oil marketers in Abuja and neighbouring states.
This led to massive queues in outlets, such as the NNPC mega station on the Gwarimpa axis of the Zuba-Kubwa Expressway, Conoil and Total filling stations directly opposite the headquarters of NNPC in the Abuja city centre, and Salbas filling station at the Dei-Dei end of the Zuba-Kubwa expressway, among others.
Independent oil marketers, who own over 70 per cent of filling stations across the country, blamed the hike in the ex-depot price of petrol as dispensed by private depot owners.
The National President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, said that private depot owners had raised the ex-depot price of PMS to N710/litre, whereas the pump price of the commodity at NNPC retail stations was N617/litre.
Maigandi said, “The current situation is a result of how the private depot owners have been selling their products. It has been very difficult for independent petroleum marketers to get the product and sell it in Abuja and neighbouring states, as well as in other states in the North.
“So, the queues you are seeing now are because of the cost of PMS by private depots. The private depots are selling at N710/litre, but if you check the price of the same product at NNPC retail outlets, it is N617/litre.
“Therefore, by the time the independent marketers buy from private depots and bring it to our filling stations, we will not be able to sell our product because our cost price is already so high, while the cost at NNPC retail outlets is far lower.
“And you know that when we buy it at the rate of N710/litre, we have to add transportation cost again because there is no equalisation. And when we add the cost of transportation, the pump price is going to be higher than the N710/litre ex-depot price, whereas NNPC stations sell at N617/litre.”
Maigandi explained that because of the widespread number of stations operated by IPMAN, any distortion in the supply of products to members of the group would lead to fuel queues because major marketers and NNPC stations were fewer in number.
On whether IPMAN members cannot get direct PMS supply from NNPC, instead of buying the product from private depots, he replied, “That is what we have been negotiating with them (NNPC), and they promised us that they will start giving us our allocation.
“They have started, but the quantity is small compared to the number of retail outlets operated by IPMAN nationwide. We are getting products from NNPC, but the volume is too small for our members.
“So, we are requesting additional volumes because, in Abuja alone, we have over 250 retail outlets belonging to IPMAN members. This is just for Abuja. We have not talked about Niger, Kaduna, and other states in the North, not to mention the number nationwide.”
Maigandi, however, stated that the queues for petrol were not pronounced in remote villages, adding that “when you go to the villages, you will see that there are no queues.”.
“But in the city centres, where you have NNPC stations selling very cheaper than the N710/litre price, you will see queues there, as well as in front of the few outlets that have products to dispense.”
The IPMAN president said petrol was not scarce, as there were enough volumes in-country concerning what was imported by NNPC – Nigeria’s sole importer of the commodity.
Economy
42 Million Litres of Imported Fuel Set to Arrive as Local Refiners Struggle to Meet Demand
About 42.3 million litres of imported Premium Motor Spirit (PMS), commonly known as petrol, is set to arrive in Nigeria, according to oil marketers on Friday. They emphasized the need for local refineries to boost output as importation remains necessary to meet domestic fuel demand.
Petrol dealers pointed out that imports would continue until Nigeria’s local production, including from modular refineries and the Dangote Petroleum Refinery, can sufficiently supply the market. As of now, production levels at these refineries fall short, compelling dealers to rely on imported supplies of diesel and petrol.
In early September, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced that the Dangote Refinery would initially supply 25 million litres of petrol daily, rising to 30 million litres starting in October 2024. According to NMDPRA, an agreement was reached with NNPC to supply local crude to Dangote’s refinery in Nigerian currency.
“NNPC has agreed to commence crude oil sales to Dangote Refinery in naira, starting with a supply of 25 million litres of PMS this September, which will increase to 30 million litres by October 2024,” NMDPRA posted on social media.
However, oil marketers claim the Dangote facility, valued at $25 billion and based in Lekki, has not yet reached these volumes, making further imports necessary to fill the gap. One major dealer, who requested anonymity, reported, “We expect about 32,000 metric tonnes of PMS to arrive next week, equivalent to around 42.3 million litres.”
Two prominent marketers are collaborating on the importation, supplementing supplies previously brought in by other dealers. “The consignments are shared between major marketers. This doesn’t exclude us from buying from Dangote Refinery, but in a deregulated market, we have the freedom to source competitively,” the dealer explained.
From October 18 to 20, 2024, four vessels carrying approximately 123.4 million litres of petrol docked at Nigerian ports, enhancing fuel supplies nationwide. These deliveries confirm a recent report that revealed oil marketers are actively importing fuel to support the Dangote Refinery’s limited output.
Another dealer commented, “Many marketers are ramping up imports, while those who cannot import buy from Dangote. The market’s now open, so everyone sources as they need. It’s essential, especially since local production is still insufficient.”
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Ukadike Chinedu, confirmed that while IPMAN members haven’t yet started importing PMS, the market is now open to anyone with the capacity to import.
Economy
Naira Falls Against Dollar Despite Renewed CBN Actions
The Nigerian naira experienced a mixed performance on October 25, 2024, with a slight depreciation in the parallel market and a notable gain in the official market. The currency weakened by 0.12% against the US dollar, trading at N1,730/$1 in the parallel market—a marginal decline of N2 from the previous rate of N1,728.
This marks the second consecutive day of depreciation following a 0.58% appreciation on October 23, when the naira was valued at N1,725/$1. Meanwhile, in the Investors and Exporters (I&E) window, the naira reversed a threeday depreciation streak, closing at N1,601.20/$1, a 3.30% improvement from the prior close of N1,654.09.
Since October 15, the naira has consistently traded above the N1,600 threshold in the official market. The gap between the parallel market rate and the official rate has widened significantly, increasing to N128.80, up from the previous day’s difference of N73.91. Additionally, data from the Nigeria Association of Financial Markets Institutions (NAFEM) revealed a 69% surge in foreign exchange transactions, totalling $230.99 million, compared to $136.68 million previously.
CBN Reserves and Policy Measures
The Central Bank of Nigeria’s (CBN) external reserves saw a 0.188% rise to $39.230 billion on October 22, 2024, marking the ninth consecutive day of growth. Recent CBN policies, including interest rate hikes aimed at curbing inflation and stabilising the economy, appear to be stabilising the domestic currency. The CBN has also cleared backlogs of foreign exchange obligations, including payments to airlines.
Market Trends
Throughout 2024, the naira has faced sustained depreciation, losing over 50% of its value since the beginning of the year in the official market. In January, the currency traded at N838.95/$1 and breached the N1,500/$1 mark in February. A brief rally in March saw it recover to N1,300.43/$1, before reaching a record low of N1,660.5/$1 in October.
In the parallel market, the naira started the year at N1,215 per dollar, reaching an alltime low of N1,880 in February before recovering to N1,110 in April. However, it has since resumed a downward trajectory, recently dipping into the N1,700 range.
Key Data Points
On October 24, 2024, the naira traded as high as N1,696 per dollar and as low as N1,585.43/$1, reflecting a disparity of N110.57 before settling at N1,601.20 in the I&E window.
By October 25, the naira traded at N1,730 per dollar in the parallel market, indicating a slight 0.12% decline from the previous day’s rate of N1,728.
In the I&E window, the currency closed at N1,601.20/$1, demonstrating a 3.30% improvement from the prior close of N1,654.09.
Trading volumes in the I&E window surged, reaching $230.99 million compared to $136.68 million the day before, highlighting increased market activity and dollar demand.
Key Factors at Play
During a recent press briefing at the ongoing World Bank/IMF meetings, the newly launched Global Financial Stability Report underscored signs of stability in the Nigerian naira, largely attributed to recent CBN policies. The International Monetary Fund (IMF) noted that the naira’s steadiness results from actions taken by the CBN, including clearing the foreign exchange backlog and raising interest rates.
The report indicated that these policy measures have led to positive developments, contributing to the naira’s improved stability.
What to Expect
With the naira recently breaching the N1,700/$1 mark, there is potential for a shortterm recovery. Global oil prices have stabilised between $79 and $81 per barrel, and the CBN’s consistent interventions may alleviate some inflationary pressures, fostering a more positive outlook for the naira. Additionally, new policies aimed at reducing foreign exchange demand could further support the currency, potentially bringing it back into the N1,600/$1 range in the near term.
Notably, the official exchange rate closed at N1,601.20 on October 25, following the CBN’s $60 million intervention in the official market on October 17, when dollars were sold to deposit banks at N1,540.
Nevertheless, the naira’s trajectory will remain closely tied to broader macroeconomic factors, including inflationary pressures and foreign currency supply. As Nigeria navigates these challenges, the effectiveness of policy responses will be crucial in determining whether the naira stabilises or faces further depreciation.
Economy
Elon Musk’s Starlink reverses tariff hike in Nigeria after regulatory sanction
Elon Musk’s Starlink has announced the suspension of its monthly service tariff hike for Nigerian users weeks after regulatory sanction by the Nigerian Communications Commission, NCC.
The company disclosed this in a statement to users on Thursday.
According to Starlink, the decision to put on hold the tariff hike was due to regulatory challenges.
Explaining that the hike was on account of inflation and designed to help “maintain operations and continue delivering reliable service,” the company, on Thursday, however, said it temporarily suspended the new price regime due to regulatory challenges.
“If you’ve already been charged at the higher rate, a one-time credit will be applied to your account to cover the difference. You also have the flexibility to cancel your service at any time,” the company stated.
DAILY POST recalls that last month, Starlink announced a 97 per cent tariff hike for monthly subscriptions from N38,000 to N75,000.
However, Nigeria’s telecommunications regulator, NCC, said in a statement on October 9 that Starlink increased the subscription tariff without its approval and vowed to sanction the company.
In the past months, mobile telecommunications operators in Nigeria had demanded a tariff hike but did not receive greenlight from NCC.
-
News14 hours ago
Hon. Ikwechegh tenders public apology, for humiliating delivery driver, seeks professional counseling on behavioral change
-
News13 hours ago
Northern govs move against President Tinubu’s proposed Reforms
-
News8 hours ago
Just in: Again, NNPCL Increases Fuel Pump Price To 1,025 In Lagos
-
News14 hours ago
FG moves to teach mathematics in Yoruba language
-
Sports14 hours ago
Man City’s Rodri Beats Vinicius, Bellingham To Win 2024 Ballon d’Or
-
News7 hours ago
Many terrorists killed after NAF airstrikes in Borno
-
Entertainment13 hours ago
I had 20 boyfriends when I met my husband Ned Nwoko – Regina Daniels
-
Politics4 hours ago
Protest in INEC over demand for Ondo REC redeployment