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Nigerian stakeholders disagree on impact of local refining on petrol price

Published

1 year ago

September 10, 2023

Following conflicting arguments on the likely effect of local refining on the price of petroleum products in Nigeria, major oil marketers in the country have reiterated that likely reduction in prices will be minimal even if the refineries were revamped.

The position by the body, Major Oil Marketers Association of Nigeria (MOMAN), counters reports credited to another group in the sector, the Independent Petroleum Marketers Association of Nigeria (IPMAN), which had claimed that petrol price would crash to as low as N200 if crude oil were refined locally.

Joseph Obele, the chairman of the Rivers State chapter of IPMAN had claimed in an interview that “until our nation-owned refineries are functional, fuel prices will keep increasing due to international variables. But when our refineries are functional, Nigerians will buy fuel less than N200 per litre”.

Chief Executive Officer and former MOMAN chairman, Tunji Oyebanji, in another seperate interview on Saturday, agreed that the dollar’s exchange rate had an impact on gas prices.

He added that there had been an upward trend in crude oil prices on the global market as a result of strong demand and production curbs by the Organisation of Petroleum Exporting Countries (OPEC).

“Don’t you think the exchange rate of the dollar and naira is not affecting the price of petroleum products? Nigerians need to understand that the problem is actually the exchange rate, not the price of petrol.”

He noted that reports that petrol price would drop to N200 per litre were misleading.

Although Nigeria is one of the world’s top oil producers, 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 Warri (WRPC). Despite several efforts to revive the refineries, none of them has been operating at full capacity for years.

The minister of Petroleum, Heineken Lokpobiri, last month, stated that the “Port Harcourt refinery will come on board by the end of the year,” while two other facilities in Warri and Kaduna would start processing crude between the first quarter and end of 2024.

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VenturesNow

IMF, Egypt reach agreement for fourth review of Egypt’s $1.2 billion loan request

Published

1 day ago

December 26, 2024

Ifeoluwa Dada

Egypt and the International Monetary Fund (IMF) have reached a staff-level agreement over the fourth review of the Extended Fund Facility arrangement, which might lead to a $1.2 billion payout under the program.

In March, Egypt, struggling with rising inflation and cash shortages, consented to the $8 billion, 46-month facility. Its economic problems were made worse by a precipitous drop in Suez Canal revenue over the last year due to regional tensions.

Over the next two years, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of GDP, according to the IMF, emphasising removing exemptions rather than raising taxes.

According to a statement from the IMF, this would allow it to expand social expenditure to support vulnerable populations.

“While the authorities’ plans to streamline and simplify the tax system are commendable, further reforms will be needed to enhance domestic revenue mobilization efforts,” the statement said.

According to the IMF statement, Egypt had also committed to maintaining its commitment to a flexible currency rate and to taking more urgent action to guarantee that the private sector became the primary driver of development.

The IMF’s executive board still has to accept the fourth review’s staff-level agreement.

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Libya’s eastern govt accepts petrol subsidy elimination

Published

1 day ago

December 26, 2024

Ifeoluwa Dada

In a recent statement, the eastern government of Libya claimed it had reached a consensus on a plan to eliminate gasoline subsidies and would draft a mechanism to carry out the accord.

Additional information on the idea was not released by the administration led by Osama Hamad, a challenger to the internationally acknowledged Tripoli-based government.

However, it is uncertain if Hamad’s government would be able to carry out the plan in the divided nation.

According to the Global Petrol Prices online tracker, a litre of gasoline costs just 0.150 Libyan dinars ($0.03) in OPEC member Libya, making it the second-cheapest in the world.

Following an uprising against former ruler Muammar Gaddafi in 2011, smuggling networks have thrived in the ensuing political unrest and armed fighting. In 2014, conflicting eastern and western governments separated the nation.

A World Bank analysis estimates that the annual value of fuel smuggling from Libya is at least $5 billion.

In a meeting with Mari Barrasi, the deputy governor of the Central Bank of Libya (CBL), located in Tripoli, and four members of the bank’s board of directors, Hamad in Benghazi supported the idea of removing subsidies.

The CBL’s Benghazi branch offices served as the venue for the conference.

The eastern parliament appointed Hamad in 2023 to succeed Abdulhamid Dbeibah, who had been put in position in 2021 under a U.N.-backed procedure that the parliament said had lost its legitimacy.

Dbeibah, who is located in Tripoli, stated in January that he will conduct a public poll on the topic of eliminating gasoline subsidies, but he hasn’t done anything about it since.

According to CBL figures, gasoline subsidies cost 12.8 billion Libyan dinars between January and November of this year. 4.8 Libyan dinars to $1 is the official exchange rate.