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Nigeria: Fresh concern over petrol price hike as Naira falls to ₦945/$1

Published

9 months ago

August 25, 2023

A likely rise in the price of Premium Motor Spirit, popularly called petrol in Nigeria, has surfaced again following a recent plunge of the Nigerian currency, Naira, which now exchanges at over 900 to the United States dollar.

Concerns about whether the pump price could remain the same after the Naira declined against the dollar on the black market from 900 to 920 on Thursday. The naira reached 945 to the dollar in the black market two weeks ago but it recovered.

Recently, the marketers claimed that the CBN’s Importers and Exporters (I&E) official window for foreign exchange, which had a lower exchange rate of approximately N740/dollar, had remained illiquid and was unable to offer the $25 million to $30 million needed for dealers to import PMS.

But state oil firm, Nigerian National Petroleum Company Limited (NNPCL), played down fears of an imminent rise in petrol, insisting that there are no intentions for a price raise. Experts have said NNPCL price assurance should pose concern of another possible price-control regime which will eventually birth payments of subsidy on petrol.

On Thursday, the marketers raised the concern of a possible price hike again following the latest exchange rate. The price is now projected to be between N680/litre to N700/litre for PMS, stressing that the forex rate was about N750/$ to N800/$ at the time the cost of petrol was pegged at N590/litre to N617/litre.

Nigeria, a West African nation, is one of the world’s top oil producers, yet it does not refine crude oil domestically. The state-owned Nigerian National Petroleum Corporation (NNPC) operates four refineries: two in Port Harcourt (PHRC), one each in Kaduna (KRPC), and one in Warri (WRPC). Despite several efforts to restart the refineries, none of them has been operating at full capacity for years.

The need to export petroleum products for refining is a major cost factor that affects the price of the end products. In May, the country launched a 650,000 barrels per day (BPD) integrated, private refinery which according to the central bank governor at the time, Godwin Emefiele, said is expected to generate 12,000 megawatts of electricity and over 135,000 permanent jobs, help the country save $25b, and $30b forex annually.

But the hope has not materialised as the refinery is yet to begin full operation, despite its elaborate commissioning, and projection to get to work by July.

Related Topics:Featured Fuel Subdidy Nigeria

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Nigeria’s inflation hits 28-year high of 33.69% in April

Published

17 hours ago

May 16, 2024

Ifeoluwa Dada

Nigeria’s consumer inflation reached a 28-year high of 33.69% in April, up from 33.20% in March, according to statistics agency figures released on Wednesday.

President Bola Tinubu’s administration has slashed petrol and energy subsidies and devalued the local naira currency twice.

To manage pricing pressures, the central bank has hiked interest rates twice this year, including the highest hike in almost 17 years. The central bank governor has stated that rates will remain high for as long as necessary to reduce inflation. The bank will host another rate-setting meeting next week.

When compared to the previous year, the inflation rate in April 2024 was 11.47 percentage points more than in April 2023, when it stood at 22.22 percent. This implies that the headline inflation rate has increased dramatically during the last year.

According to the National Bureau of Statistics, food and nonalcoholic beverages remained the largest contributor to inflation in April. Food inflation, which accounts for most of the inflation basket, rose to 40.53% yearly from 40.01% in March.

Price pressures have left millions of Nigerians facing the biggest cost-of-living crisis in decades, as they fight to satisfy their most basic necessities.

Tinubu has offered a 35% salary increase for state personnel to alleviate pressure on government workers. To assist disadvantaged households, his government has resumed a direct cash transfer program and provided at least 42,000 tons of grains such as corn and millet.

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Uganda discusses power line to South Sudan with China’s Sinohydro

Published

2 days ago

May 15, 2024

Ifeoluwa Dada

According to the president’s office, Uganda is in negotiations with Sinohydro Corporation Limited of China to build a $180 million power transmission line that would enable Uganda to export electricity to South Sudan, which is severely short on energy.

Ugandan President Yoweri Museveni received a group led by Vice President of Sinohydro Corporation Yang Yi Xin on Monday as part of the negotiations, according to a late-morning statement from Museveni’s office.

The project, according to the statement, will entail building a new substation and expanding two existing ones in addition to building a 138-kilometre high-voltage transmission line to provide power to South Sudan.

“We are very much willing to help develop this project with the required finance if needed,” Xin was quoted as telling the president.

The statement stated that Museveni endorsed Sinohydro’s proposal to carry out the project. Uganda and South Sudan inked a power sales deal in June of last year, enabling Uganda to sell electricity to South Sudan.

To enable Uganda to export electricity to South Sudan, the two nations inked a power sales deal in June of last year. The Chinese firm is completing a $1.5 billion, 600-megawatt hydropower project on the River Nile in Northern Uganda that is meant to be the source for electricity exports to South Sudan.