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Oil marketers give conditions to resume fuel importation

Oil marketers in the country have outlined conditions that will facilitate their involvement in fuel importation.

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Petrol importation gulps N1.13 trillion in 2019, as Nigeria fails another deadline 

Oil marketers in the country have outlined conditions that would facilitate their involvement in fuel importation. Operating under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN), the marketers have disclosed that having access to dollar at the rate of N306 per dollar instead of the N360 per dollar would aid the resumption of the importation of Premium Motor Spirit (Petrol).

Mr Clement Isong, the Executive Secretary/Chief Executive Officer of MOMAN, during a press briefing in Lagos, explained that getting the foreign exchange (forex) at N306 per dollar will lead to an expected open market price of N141 per litre for Premium Motor Spirit.

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In his statement, Mr. Isong said, “We don’t have forex at N306 per dollar, Forex at N360 per dollar, which is what we have access to, puts the product into tank at N142. If you then add the distribution cost, the pump price will be N164.’’

In the same vein, the marketers pointed out that there was an urgent need for the Federal Government through its agency, the Petroleum Pricing Products Regulatory Agency (PPPRA), to increase the margins on petrol in order to encourage more investments into the downstream sector of the oil industry.

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[READ MORE: Oil marketers demand exemption from N50 PoS charge)

According to the petrol pricing template of the PPPRA, the margins for retailers and dealers are N6 and N2.36 per litre respectively whereas that of transporters is N3.36.

The Chairman of MOMAN, Adetunji Oyetunji during the event, pointed out the stand of the marketers.

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Oyetunji said, “We call on the government to seize the opportunity of these lower oil prices to either give us an immediate margin increase or remove subsidy because today, the landing cost of petrol is much lower than the approved pump price.

‘’So, it gives a unique opportunity to be able to get out of this subsidy business. It happened like that in 2016 when oil price dropped significantly but we didn’t seize that opportunity’’.

It could be recalled that since 2017, the Nigerian National Petroleum Corporation (NNPC) has been the sole importer of petrol into the country after major and independent oil marketers stopped the importation of the commodity due to crude oil price fluctuations, scarcity of foreign exchange, non-settlement of subsidy debt since 2015 and some other challenges.

[READ ALSO: Oil marketers, PENGASSAN call for subsidy removal)

The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) had criticized the idea of the Federal Government being the sole importer of petrol as this has negatively impacted the industry.

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The oil industry stakeholders and financial experts have all been calling for the complete deregulation of the sector especially with petrol as this will help attract more investments in the downstream sector and stop the huge funds which are spent on subsidy annually. The Federal Government in recent times has referred to the subsidy provision for petrol as under-recovery.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Hospitality & Travel

KLM, Air France to resume flight operations in Nigeria on December 7

KLM Royal Dutch Airlines and Air France have announced they will gradually resume flight operations to Abuja and Lagos.

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KLM Royal Dutch Airlines and Air France have announced they will gradually resume flight operations to Abuja and Lagos from December 7.

According to a report by Punch, the airlines in a statement on Monday disclosed that international passengers can now fly Air France and KLM from Nigeria (Abuja and Lagos) to Paris and Amsterdam, with the possibility of further transfers to other European and North Atlantic destinations.

In a piece of travel advice, the airline asked customers to ensure they are well prepared for their trip and check the entry and travel requirements for their destination and transit countries in line with travel restrictions and governmental authorizations before making any travel plans. This is as the entry requirements may change with short notice.

General Manager Air France KLM Nigeria and Ghana, Michel Colleau, was quoted to have said, “Flights to and from Lagos and Abuja will be operated in strict compliance with the Nigerian Civil Aviation Authority and international health protocols, adhering to the highest standards of health and hygiene.”

It can be recalled that in September 2020, the Federal Government barred Air France and KLM airlines and some other foreign airlines from flight operations into the country.

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The Aviation Minister, Hadi Sirika, said that Air France and KLM were not granted approval for flight operations because tourist visa holders were not allowed entry into their countries.

Nairametrics had reported about a week ago that the Federal Government had given a go-ahead to Lufthansa, Air France/KLM and Qatar Airways to resume flight operations into the country.

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Economy & Politics

CBN retains MPR at 11.5%, holds other parameters constant

The Central Bank of Nigeria (CBN), voted unanimously to keep the Monetary Policy Rate (MPR), at 11.5%.

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Nigeria’s manufacturing sector contracts for 5th consecutive month – CBN , To test FX market, CBN pumps $50 million, CBN issues guidelines to Finance Institutions on establishment of Subsidiaries and SPVs, CBN injects $2.63 billion to defend naira in one month, CBN’s COVID-19 N50 billion targeted credit facility, CBN’s heterodox policies buoys credit growth, These industries drove business activities in September, Credit to Nigerian economy falls to N38.67 trillion as private stagnates at N30 trillion, Availability of secured credit to businesses and households increases as unsecured credit to households dips in Q3 2020 - CBN

The Monetary Policy Committee (MPC), of the Central Bank of Nigeria (CBN), has voted unanimously to keep the Monetary Policy Rate (MPR), at 11.5%.

READ: Central Bank says monetary policy not to blame for rising food cost

This was disclosed by Governor, CBN, Godwin Emefiele while reading the communique at the end of the MPC meeting on Tuesday. Other parameters such as Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor remain unchanged.

READ: Polaris Bank: Back from the dead

The committee highlighted that inflation continues to be influenced by structural policies, increase in petrol price and latest #EndSARS protest.

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READ: Our view on CBN’s revision of SDF guidelines by CSL Capitals

Highlights of the Committee’s decision

  • MPR was kept at 11.50%
  • The asymmetric corridor of +100/-700 basis points around the MPR
  • CRR was retained at 27.5%
  • While Liquid Ratio was also kept at 30%

READ: CBN reviews minimum interest rates on savings deposit to 1.25%

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More details shortly…

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Energy

Port Harcourt Refinery to get a facelift in Q1 2021 – NNPC

NNPC is set to commence the second phase of the rehabilitation of the Port-Harcourt Refinery in the first quarter of 2021.

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NNPC reports explosion at OML 40 facility

The Nigerian National Petroleum Corporation (NNPC) is set to commence the second phase of the rehabilitation of the Port-Harcourt Refinery in the first quarter of 2021.

According to the African Business Intelligence Report, NNPC is working hard and round the clock towards ensuring that four refineries are up and running by 2023.

The Group MD of NNPC, Mallam Mele Kyari made this disclosure and said, “The vision of revamping the pipelines is in tandem with the Refineries Rehabilitation Project, which we have promised to deliver by 2023. I am happy to announce that the funding challenge which had stalled the second phase of the rehabilitation of the Port Harcourt Refinery has been resolved. The contract for the second phase will soon be awarded and work will commence in Q1 of 2021.”

According to Mallam Kyari, a lot has been put in place to boost exploration and production with a view of achieving 3m barrels per day production target.

(READ MORE: FG discloses when Nigeria will start exporting petroleum products)

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What you should know

Nairametrics had reported that the first phase rehabilitation was to take place 2 years ago and to be executed by Milan-based Maire Tecnimont S.p.A, in collaboration with its Nigerian affiliate, Tecnimont Nigeria.

It was expected that after the phase-1 of rehabilitation, the Refinery complex should be able to reach its 60% capacity utilization.
Further rehabilitation of the PHC refinery is expected to enhance its production capacity to meet its production targets

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Putting the refineries in good shape to produce optimally would stem down the huge imports of the refined petroleum products, considering that about 90% of the refined petroleum products consumed in Nigeria are imported.

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