Oil
South Africa to reduce fuel prices May 1st
JOHANNESBURG – The South African Department of Energy has announced that the next fuel price adjustments will be effected on Wednesday, 1 May 2013. The current fuel price review period closed on 25 April 2013.
As has been indicated by the department in earlier statements, the price of fuel has followed a downward trend as evident in the over-recovery in the prices of all grades of petrol and diesel in this adjustment. The reasons for the movements in the fuel prices are as follows:
*Decrease in the price of Brent Crude oil
The average Brent crude oil price decreased by approximately 5.48% mainly because of the supply of crude oil outstripping demand during the current fuel price review period (27 March 2013 to 25 April 2013). The following are some of the contributing factors:
Slower than expected economic growth in China and the USA, the two world’s biggest economies. Continued economic weakness in the Eurozone as well as the slowdown in in fuel consumption in Japan added to the weaker demand. In addition, the International Monetary Fund lowered its outlook for world economic growth to 3.3%, down from its January forecast of 3.5%.
The resumption of crude oil flows, which had been shut for most of 2012, from non-OPEC members increased to supply crude oil to the market.
Crude oil prices are, however, expected to recover as refineries, particularly in the USA, come back into production ahead of the driving season. Geopolitical occurrences in North of the African continent are also expected to make a contribution to the upward movement of the crude oil price.
*Decrease in the price of International petroleum products
The prices decreased drastically due to weaker than expected demand for petrol in the US and this led to an average decrease in the international product prices.
*Recovery of the Rand / Dollar exchange rate
The monthly average of the Rand strengthened against the USD$ resulting in the decrease in the Basic Fuel Price (BFP). The Rand benefited from capital flows to emerging market economies as a result of the following:
The Bank of Japan’s plans to embark on a monetary stimulus over the next two years and
The US Federal Reserve being unlikely to end its quantitative easing programme soon because of sluggish growth in the world’s biggest economy.
These monetary stances contributed to capital inflows to South Africa through investments in bonds.
*Adjustment to the Slate Levy on petrol and diesel
In line with the provisions of the Self-Adjusting Slate Levy Mechanism, a Slate Levy will decrease by 6.56 cents a litre from 21.92 c/l to 15.36 c/l and will be implemented into the price structures of petrol and diesel with effect from 1 May 2013.
*Anticipated fuel price adjustments
Based on the average unit over-recoveries and the implementation of a Slate Levy decrease of 6.56 c/l on petrol and diesel, the following fuel price changes will be implemented on 1 May 2013, namely:
Petrol (all grades): 73.0 c/l, decrease;
Diesel (0.05% Sulphur): 55.56 c/l, decrease;
Diesel (0.005% Sulphur): 56.56 c/l, decrease;
IP wholesale: 58.0 c/l, decrease;
SMNRP for IP: 77.0 c/l, decrease; and
Maximum Retail Price for LPGas: 81.0 c/kg, decrease.
Oil
FG Introduces New Incentives To Revitalize Nigeria’s Oil & Gas Industry
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
Business
Tinubu set to approve ExxonMobil-Seplat oil deal, expands CNG bus initiative
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
Oil
ExxonMobil To Invest $10bn In Nigeria’s Deep-Water Oil Operations
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.