The importation of Premium Motor Spirit (PMS) into
Nigeria is to gulp extra cost of over N2.369 billion per day
from Federal Government and marketers as the landing
cost for fuel has soared to N212.7 per litre.
This came as oil prices hit their highest levels since July
2015 with Brent reaching $58.37 and $55.24, before
paring gains on the strong dollar.
Buoyed by this, the Federal Government, checks by New
Telegraph showed yesterday, is already mulling total
deregulation of the downstream sector.
While the modulated bracket of N135-N145 is given as
official price for fuel, checks showed that extra N67.7 is
incurred on over 35 million litres daily imports as the
landing cost soared to N212.7 per litre.
Head of Energy Research at Ecobank, Dolapo Oni, stated
that the landing cost for PMS was N165 per litre for a
$52 per barrel price.
“When oil price was at $52 dollars per barrel, the landing
cost was N165 per barrel, later when it was $55, the price
soared to N210 per litre,” the financial analyst said.
Now that it is $58 per barrel, the landing cost hovers
around N213 per litre, checks by New Telegraph showed.
The Central Bank of Nigeria (CBN) had earlier asked
banks to submit bids for a “special currency auction” to
clear the backlog of matured outstanding dollar
obligations for petrol importers and selected sectors of
the economy.
The Petroleum Products Pricing Regulatory Agency
(PPPRA), an agency saddled with pricing regulation, has
taken down its website, keeping the public in the dark on
change in pricing template for petroleum product.
Spokesperson for the agency, Lanre Oladele, could not be
reached for comments. His mobile phone was not
available while SMS sent was not replied.
The PPPRA website, however, showed default webpage,
which read: “SORRY!
If you are the owner of this website, please contact your
hosting provider: webmaster@ pppra.gov.ng. “It is
possible you have reached this page because: The IP
address has changed. There has been a server
misconfiguration.
The site may have moved to a different server.” Earlier
estimates from the PPPRA showed that the country
needs an average of $500 million every month to import
refined petroleum products, since all of its three refineries
are currently producing at less than 25 per cent of their
installed capacity.
The price of PMS could surge to over N220 per litre if the
new realities of the oil market are taken into
consideration. The oil prices turned negative after earlier
hitting 18-month highs yesterday, the first trading day of
2017, as the dollar rallied to its highest since 2002.
Traders said crude prices were buoyed earlier in the day
by hopes that a deal between OPEC and other big oil
exporters to cut production, which started on Sunday,
would drain a global supply glut.
Brent futures were down 95 cents or 1.7 per cent at
$55.87 a barrel by 12:05 p.m. EST. U.S. West Texas
Intermediate (WTI) crude fell 95 cents or 1.8 per cent to
$52.77 per barrel. Earlier in the session, both oil
contracts hit their highest levels since July 2015 with
Brent reaching $58.37 and $55.24, before paring gains on
strong dollar.
“The dollar strength is certainly weighing on oil prices,”
said Andrew Lipow, President of energy consulting firm,
Lipow Oil Associates in Houston, noting U.S. stock
markets also pared their gains from earlier in the day with
the dollar rally.
