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Price Watch: Petrol pump prices remain unchanged in March

The average pump price of premium motor spirit (Petrol) remain unchanged in March 2019. According to the NBS, the average pump price was ₦145.30 in March

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Petrol Pump price watch

The average pump price of premium motor spirit (Petrol) remained unchanged in March 2019. This is revealed in the latest PMS price watch data released by the National Bureau of Statistics (NBS).

According to the NBS data, the average pump price was ₦145.30 in March, the same price recorded in the previous month. This indicates a 0.0% month-on-month change.

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However, Year-on-year, the average price of PMS further decreased by 11.1% from 15% recorded in February.

Basic Highlights

  • Petrol pump price remained unchanged at ₦145.30 in March
  • States with the highest average price of Petrol are: Yobe (147.55), Taraba (₦147.00), and Kebbi (₦146.75).
  • States with the lowest average price of Petrol are: Zamfara (₦144.39), Abuja (₦144.00), and Bauchi (₦143.89)

Petrol Pump Price was highest in Yobe State

Yobe state witnessed the highest average price, as petrol was sold at an average of N147.55 per liter. Month-on-month, the average prices of Petrol in the state increased by 1.70 percent.

Also, Taraba state ranked second, with an average pump price of ₦147.00 per liter. Month-on-month, the average price of Petrol in the state dropped by 2.36 percent.

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Lastly, Kebbi state also witnessed a high average Petrol pump price of 146.75 per liter.  Month-on-month, the state witnessed an increase of 0.82 percent.

Petrol consumers in Zamfara state witnessed the lowest pump prices

The average pump price of petrol in Zamfara State was the lowest in the country, as the commodity was sold at ₦144.39. Month-on-Month, the average pump price dropped by 0.76 percent. Year-on-year, it also dropped by 5.22 percent.

Abuja state ranked second with an average petrol pump price of ₦144.00 in March. This represents a 0.35 percent price month-on-month increase.

Also, the average pump price of Petrol in Bauchi made the list as the product was sold at ₦143.89 in March. Month-on-month, it increased by 0.42 percent.

Consumers in the Northeast Zone witnessed highest average pump price

Across the six geopolitical zones, the Northeast once again maintained the highest average pump price of ₦145.96 in March from ₦145.74 recorded in February. The southeast zone ranked second with the highest average pump price of ₦145.39.

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The remaining zones are ranked in these order – South-South (₦145.32), North West (₦145.26), North Central (₦145.04) and South West (₦145.03).

Patricia

Brace up for new pump price, as Petrol Price may rise

Lately, there have been reported cases of queues at some petrol service stations across the country. Some Nigerians are reportedly already thinking about the hardship they may encounter if the emerging fuel queues in Lagos, Abuja, Ibadan, and Port Harcourt extend to other cities.

Note that as at the time of filing this  report, queues have reportedly cleared in some major cities

Also, recall that since the International Monetary Fund’s (IMF) called for Nigeria’s removal of the fuel subsidy, there has been a renewed national debate on the matter. There has also been growing rumors that the Federal Government of Nigeria is about to announce a new pump price regime for PMS.

New pump price may just be here 

The Nigerian Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, recently disclosed that the landing cost of PMS is N35 higher than the pump price of N145 per litre. To prepare the mind of Nigerians and their businesses, the minister further disclosed the following:

“I think the labour union has never really said they would not be supportive of an attempt to take away this subsidy element; the union has always said, ‘If you are doing it, show me what you [will] do with those new receipts of income. Two, what do you do with the refineries?’ Therefore, we need to address those to even get their buy-in.”

The reported possible increase in  pump price has been subject to media scrutiny in recent days, to avoid a repeat of the current administration’s earlier unexpected increase of petrol pump price from N87/liter to N145/liter in 2016.

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Around the World

Who will ruin the OPEC+ party?

Russia has always been the black sheep in the OPEC+ family as they tend to ever deviate from consensual commitment concerning the oil market.

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OPEC+

The stage is set for OPEC+ to virtually meet on the 4th of June to discuss the extension of output cuts. The previous agreement on curbs resulted in a historic reduction of 9.7m barrels per day. Compliance has been commendable even to the point where some nations started shutting production before the effective date. The meeting in April was an emergency meeting after the diplomatic intervention by Donald Trump, who needed to save the energy industry in the United States.

This week’s meeting does not have any dramatic buildup to it (although the date has been brought forward to factor certain fundamentals). Still, there is a consensus or belief that the meeting will be successful, which is why prices have soared in the last couple of days. On Tuesday, Oil prices closed in on three-month highs because of the positive anticipation that OPEC+ producers would conclude in the extension of the production cuts at the forthcoming meeting. Brent Oil broke the $39 range, which has not been feasible since March.

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READ ALSO: Subsidy and PIB

But energy analysts and traders familiar with the history of OPEC meetings know very well that surprises and disagreements can spring up during the sessions and can negatively affect prices. To recall the last two meetings, the first meeting in March that led to the crash of prices from $50 to $32 after the discord between Russia and Saudi Arabia were Russia did not believe cuts were necessary to salvage the demand destruction caused by the coronavirus. The second meeting, which is the more recent, featured a Mexican standoff were Mexico would defiantly not accept their part in the global cuts. It took efforts by Trump (again) to agree to shoulder some of the cuts imposed on Mexico.

Skeptics believe Russia might be this week’s party pooper. Russia has always been the black sheep in the OPEC+ family as they tend to ever deviate from consensual commitment concerning the oil market. On Wednesday, Oil was observed to retreat by more than 4%, after reports suggested that Russia was mulling over easing production cuts as planned in July. Russian Minister, Novak expressed how the country expects global supply and demand to balance in June and July. This optimism is shared amongst Russian industry players who have felt the pains of output cuts, especially producers who must maneuver shutting down many wells without causing damage to the oil fields.  To be fair, Russia is responsible for about a quarter of the total OPEC+ cuts and prices at these levels still negatively impacts the Russian budget.

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READ MORE: Global oil market to re-balance in 2 months’ time

Although scaling back curbs is line with the OPEC+ deal and demand picking up globally as expressed by the Russian Energy Minister is true, it would be a classic tale of Russian Roulette if countries ease back on production cuts. The market demand must fully recover. There is still a shortage demand for consumption for jet fuel as airlines are not operating at normal levels, with experts saying it would take years before the airline industry recovers. History suggests we should be cautious with Russia. Moscow is solely interested in increasing market share and winning its veiled rivalry with U.S shale oil.  In the short-term, Russia’s defiance in February is why we are at these levels.

It is no surprise that Saudi Arabia Crown Prince Mohammed Bin Salman and United States President Donald Trump individually have had calls with Russia’s President on the need for coordination and cooperation in the oil markets days before the OPEC+ meeting. It seems that these discussions have been positive, and prices have reacted in this manner. Head of Oil market analysis at Rystad Energy, Bjornar Tonhaugen affirmed that “at this stage, there are two only variables that can significantly move prices, which are “Hints on the direction at this meeting and the outcome, and the rate of the shut production’s reactivation.”

READ ALSO: Ajaokuta’s completion to kick off as Russia provides funds

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Oil Bear traders would be monitoring this meeting; any sign of disagreement would be treated with selling pressure. However, a successful meeting does not mean an immediate rise in price because the success has already been “priced in.” Hopefully, we have a successful meeting. Oil prices need back to back rallies to sustain its ascension to the top. Nigeria needs this, the OPEC cartel needs this, Shale oil companies need this, and the Kremlin budget needs this too.

Patricia

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Business News

UAC of Nigeria Plc. Announces Annual General Meeting

Annual General Meeting of the Members of UAC of Nigeria PLC will be held at UAC House No. 1-5 Odunlami Street, on Wednesday, 15th July, 2020

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CONSUMERS|UACN: Weak operating performance, UAC of Nigeria Plc. Announces Annual General Meeting

UAC of Nigeria Plc., today, notified the public that the next Annual General Meeting of the Members of UAC of Nigeria PLC will be held at UAC House (12th Floor), No. 1-5 Odunlami Street, Lagos, Nigeria on Wednesday, 15th July 2020 at 10.00 o’clock in the forenoon in order to transact the following businesses:

Here are the agenda for the meeting scheduled by UAC Of Nigeria Plc.

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READ ALSO: Fines: NSE makes over N154 million from banks, others

  1. To lay before the Members the Report of the Directors, the Consolidated Statement of Financial Position of the Company as at 31st December 2019, together with the Consolidated Statement of Comprehensive Income for the year ended on that date and the Reports of the Auditors and the Audit Committee thereon.
  2. To declare a Dividend.
  3. To elect & re-elect Directors.
  4. To authorize the Directors to fix the remuneration of the Auditors.
  5. To elect Members of the Audit Committee.
  6. To fix the remuneration of the Directors.
  7. To renew the general mandate authorizing the Company to enter into recurrent transactions which are of a trading nature or those necessary for its day to day operations with related parties or companies in accordance with the Rules of the Nigerian Stock Exchange governing transactions with related parties or interested persons.

It will be recalled that UAC of Nigeria Plc reported FY 2019 revenue of N79.2 billion while the reported Pre-tax Profit of N7.5 billion. A loss of N14.6 billion arising from discontinued operations (UPDC) led to a net loss of N9.3 billion in FY 2019. Excluding the loss from discontinued operations, the company made a Net Profit of N5.3 billion (up 26% y/y) in FY 2019.

 

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Companies

Nigeria’s tier-1 banks earn N18.4 billion from account maintenance charges in Q1 2020

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

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Nigeria's banks, Account Maintenance Charges

Nigeria’s tier-1 banks — comprised of First Bank, UBA, GTBank, Access Bank, and Zenith Bank (FUGAZ) — generated a total of N18.4 billion from bank maintenance charges in Q1 2020. The sum is 17.12% more than N15.6 billion that was generated by the five banks during the comparable period in 2019.

This is according to recent checks by Nairametrics Research, a breakdown of which revealed that Zenith Bank generated the most income from account maintenance fees, followed by Access Bank and then, GTBank.

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See the breakdown below.

  • Zenith Bank Plc: N5.7 billion
  • Access Bank Plc: N3.9 billion
  • Guaranty Trust Bank Plc: N3.3 billion
  • First Bank Plc: N3.1 billion
  • United Bank for Africa Plc: N2.3 billion

READ MORE: Stocktaking: Ebenezer Onyeagwu’s year as CEO of Zenith bank

What you should know about account maintenance charges

Banks’ earnings from account maintenance charges, though low when compared to other revenue streams, still make up a significant portion of their non-interest income.

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According to the latest directive by the Central Bank of Nigeria on bank charges, Nigerian banks are allowed to charge their customers a “negotiable” N1 per mille. What this means is that banks can charge N1 per N1000 debit transactions on current accounts. Banks’ account maintenance charges come in the form of COT (i.e., Commission on Turnover) which is a charge levied on customer withdrawals by their banks. In Nigeria, these charges are mainly applicable to current accounts.

“Current Account Maintenance Fee (CAMF): Applicable to current accounts ONLY in respect of customer-induced debit transactions to third parties and debit transfers/lodgments to the customer’s account in another bank. Note that CAMF is not applicable to Savings Accounts,” said part of the CBN directive.

(READ THIS: You must know these terms if you want to own a bank account in Nigeria)

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Customers don’t like account maintenance charges

Interestingly, a lot of Nigerian bank customers are not keen on bank maintenance charges. After all, nobody likes to get debit alerts, especially so when such is coming from their banks. Perhaps, the main reason some customers dislike bank maintenance charges is because they tend to be higher than the interest capitalised entitled to such customers. Professor Ayobami Ojebode of the Department of  Communications and Language Arts, University of Ibadan, recently complained about this, saying:

“Dear bank, I see o! Don’t think I don’t see you! You credit me N50 interest on my savings and debit N150 for account maintenance & card fee etc! Come here, what do you really think you are doing?”

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Patricia
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