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CRUDE OIL

President Bola Tinubu Calls for Senate Approval of N2.17 Trillion Supplementary Budget

by ONUAH YVONNE November 1, 2023

President Bola Tinubu has requested the Senate’s prompt consideration and approval of a supplementary budget totaling N2.17 trillion. This appeal was made in a letter read on the Senate floor during a recent plenary session by Senate President Godswill Akpabio.

The President’s letter outlined the key provisions of the supplementary budget, which includes N210 billion to support the proposed wage increase to N35,000 for workers and N400 billion allocated for cash transfers to vulnerable Nigerians. Additionally, the supplementary budget is aimed at bolstering the nation’s security and agricultural sectors.

Tinubu also emphasized that N18 billion is earmarked in the budget to address the upcoming off-cycle elections in Kogi, Bayelsa, and Imo.

It’s worth noting that the Federal Executive Council (FEC) had approved the 2023 supplementary budget amounting to N2.1 trillion on the preceding Monday. This budget is primarily intended to address labor wage adjustments and security concerns, among other critical areas.

Once the national assembly grants approval, the 2023 budget, which marks the final appropriation bill of President Muhammadu Buhari’s administration, will expand to a total of N28.17 trillion.

Additionally, President Tinubu has forwarded the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to the Senate for approval in preparation for the 2024 budget presentation. These documents serve as the foundation upon which budget planning is based, and they indicate a crude oil price of $73.96 per barrel and an exchange rate of N700 in the proposed budget.

November 1, 2023 0 comment

Marketers Anticipate Petrol Price at N900 per Liter Amidst Black Market Exchange Rate Soaring to 990/1k

by ONUAH YVONNE September 22, 2023

written by ONUAH YVONNE

In a recent statement, petroleum dealers have suggested that the pump price of petrol should be adjusted to fall within the range of N890 to N900 per litre. This recommendation is based on the significant depreciation of the Nigerian Naira against the United States dollar and the surge in crude oil prices in the international market.

The forex crisis, coupled with the recent escalation in crude oil prices, has raised concerns among oil marketers about the sustainability of the current petrol price of N617 per litre. Some have even asserted that the government has quietly reintroduced fuel subsidies.

“The continuous devaluation of the Naira leaves no room for the government to maintain the current petrol price of N617 per litre without incurring subsidies,” said Chief Chinedu Ukadike, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria. He further emphasized, “The parallel market exchange rate currently stands at almost N990 to the US dollar, and its impact on diesel prices is evident, with diesel retailing at nearly N1,000 per litre. Hence, the retail price of Premium Motor Spirit (PMS) should ideally fall within the range of N890 to N900 per litre.”

Ukadike added, “By our calculations, in the United States, gasoline is sold at approximately $3.9, equivalent to around N3,000 per litre. The premium gasoline variant is priced at approximately $2.89, exceeding N2,000 per litre. In comparison to other African countries, where petrol prices range from N1,200 to N1,500, the Nigerian pricing should ideally hover around N900 per litre, considering the prevailing forex rate.”

Sources reveal that the subsidized ex-depot price of petrol sold by the Nigerian National Petroleum Corporation Limited (NNPCL) ranges between N585 and N600 per litre, depending on the region of purchase. By subtracting the ex-depot cost of N600 per litre from the projected unsubsidized rate of N890 per litre, it becomes apparent that the government may currently be subsidizing approximately N290 per litre.

The recommendations put forth by petroleum dealers have ignited discussions about the necessity of government intervention to stabilize petrol prices and alleviate the burden on Nigerian consumers. As the nation grapples with economic challenges, the question of how the government addresses the petrol pricing issue remains a pivotal concern for both citizens and industry stakeholders.

September 22, 2023 0 comment

NNPC Secures $3 Billion Crude Oil Repayment Loan to Address Forex Crisis

by ONUAH YVONNE August 16, 2023

written by ONUAH YVONNE

In response to the prevailing forex crisis affecting the oil and gas sector, the Nigerian National Petroleum Company (NNPC) Limited has swiftly taken action to mitigate the situation.

The state-owned oil entity recently announced that it successfully obtained an emergency $3 billion crude oil repayment loan to stabilize the country’s exchange rates.

NNPC, in a tweet, disclosed that the critical loan was secured from AFREXIM Bank, an influential trade finance institution for Africa. The primary aim of this substantial financial injection is to bolster the value of the naira in the global market, thereby addressing the forex challenges faced by the nation.

The tweet from NNPC read: “Relief For The Naira: NNPC Ltd Secures $3 billion Emergency Crude Repayment Loan from AFREXIM Bank. The NNPC Ltd. and @afreximbank have jointly signed a commitment letter and Termsheet for an emergency $3 billion crude oil repayment loan.”

The signing of this commitment took place at AFREXIM Bank’s headquarters in Cairo, Egypt. This loan is expected to offer immediate disbursements that will empower NNPC Ltd. to collaborate with the Federal Government on fiscal and monetary policy reforms, designed to stabilize the exchange rate market.

Amidst concerns about escalating petrol prices, oil marketers recently revealed that if the dollar continues trading at elevated levels, petrol might reach prices between N680/litre and N720/litre in the coming weeks.

In a related development, the Central Bank of Nigeria (CBN) is also taking proactive measures to address the challenges facing the naira. Folashodun Shonubi, the acting Governor of the CBN, conveyed that the apex bank is prepared to unveil new intervention measures in the next few days to counter the naira’s depreciation against the dollar.

Shonubi emphasized that the government will take decisive action against those involved in illicit activities within the foreign exchange market. He confirmed that President Bola Tinubu is actively engaged in addressing the issue and exploring strategies to stabilize the naira.

These collective efforts reflect Nigeria’s determination to navigate the current economic challenges and ensure a stable financial landscape for its citizens.

August 16, 2023 0 comment