Energy
Why Fuel Prices Remain Volatile — NMDPRA
The Nigerian Midstream and Downstream Petroleum Regulatory Authority has identified crude oil sourcing, single-source domestic refining, logistics and transportation costs among factors driving volatility in fuel pump prices.
Head of Public Affairs, NMDPRA, Mr George Ene-Ita, made this known in an interview with the News Agency of Nigeria in Abuja on Sunday.
Ene-Ita described the issues surrounding continuous fuel price increases as knotty, adding that fuel prices had been completely deregulated and were, therefore, subject to market volatility.
He said the sourcing of crude oil as feedstock and the time lag between crude procurement and arrival at refineries were factored into product pricing.
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According to him, marine and inland taxes associated with the movement and supply of petroleum products were also factored into the pricing.
“This issue is knotty in the sense that there are various factors involved.
“Pump price of petrol has been completely deregulated. And if this is the case, it also means that all volatilities associated with supply have to be factored in.
“These factors include single-source domestic refining, sourcing of crude oil as feedstock, time lag between when crude is sourced offshore and when it eventually arrives at the refinery.
“They also include time lag between when PMS cargoes are ordered and when they eventually arrive our ports for subsequent inland distribution and supply in the case of imported fuel.
“There are also transportation and landing costs, as well as marine and inland taxes.
“Perhaps when the domestic refining ecosystem becomes more robust, competitive and sustainable, the issues regarding pricing will become clearer and more beneficial to consumers,” he said.
Ene-Ita said refinery pricing templates and ex-depot prices were not regulated under the current framework.
He, however, said NMDPRA was collaborating with stakeholders and agencies such as the Federal Competition and Consumer Protection Commission to ensure price equilibrium and parity at the last mile.
NAN reports that the current market price for Brent crude oil is $96.28 per barrel, driven by the ongoing geopolitical conflict and tensions in the Middle East.
The pump price of fuel currently ranges between N1,299 and N1,350 in the FCT, following an upward adjustment in the gantry (ex-depot) price by the Dangote Refinery, which ranges between N1,265 and N1,290 per litre.
Motorists and consumers have expressed concern over the continued rise in fuel pump prices, saying it has worsened hardship, inflation and the high cost of living.
Reacting to this, the Independent Petroleum Marketers Association of Nigeria urged the Federal Government to intervene in crude oil pricing for domestic refining to moderate fuel prices and ease pressure on consumers.
IPMAN President, Maigandi Garima, told NAN that the current international crude oil market posed challenges to domestic petrol pricing because refiners had to procure crude at prevailing market prices.
Garima said higher crude oil prices translated into higher production costs for refiners, who would subsequently pass the additional cost to the market.
He called for government intervention to reduce the cost of crude supplied to domestic refineries during periods of international market volatility.
According to him, such intervention should not be interpreted as a return to fuel subsidy, but as a temporary measure to support domestic refining and reduce pressure on consumers.
“What we are saying is that if Nigerians can make this huge investment, we should support them. Government can intervene by reducing the cost of crude oil to the refinery.
“When the refinery refines the product at a lower cost, it can also reduce the price for Nigerians, and this will help the economy,” he said.
Garima also called for a more predictable crude oil pricing arrangement for domestic refineries, saying frequent fluctuations made it difficult to sustain stable fuel prices.
He urged the government and relevant stakeholders to explore mechanisms that would provide a more stable crude supply and pricing framework for domestic refining.
He said such an arrangement would enable domestic refineries to plan better and potentially provide more stable prices for petroleum products.
Courtesy – NAN
The Niger Delta Youths are primed to assume national responsibilities in critical areas of the economy by protecting vital oil and gas assets in the region.
The United Niger Delta Congress (UNDC) gave the assurance at a media briefing in Abuja, over the weekend, adding that the youths of Niger Delta were ready to work with the federal government in this regard.
The group maintained that youths in the region have shown that such responsibilities, including the security of pipelines, can be entrusted to them.
Speaking at the news conference, Niger Delta Youth activist, Mallam Julius Obi, said the Niger Delta is safer while the nation’s crude is flowing based on the fact that youths in the region are doing the job.
He said that being a youth should not be a disqualification from strategic national assignments but when matched with preparation and character, a national asset.
“We are calling on the federal government to note that Nigeria is full of young men and women who are prepared, disciplined and ready to carry out national responsibilities.
“We urge the federal government to keep opening the doors of strategic national service to young Nigerians who have earned trust the only way it can be earned, by delivery,” Obi said.
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The group commended President Bola Tinubu for sustaining the security reforms in the oil and gas industry and the the National Security Adviser (NSA), Mallam Nuhu Ribadu, for coordinating the protection of the nation’s pipelines, and the management of NNPCL for providing the enabling environment.
Joseph Ambakederimo, convener of the South-South Reawakening Group, has questioned the accountability of Nigeria’s crude oil forward sales, demanding clarification on the volume of crude lifted, outstanding balances and the use of upfront payments.
Speaking during an interview on Arise TV on Sunday, Ambakederimo expressed concern over the monitoring of crude oil transactions, questioning who was responsible for tracking deliveries and providing feedback on the arrangements.
“We don’t even know who is monitoring and giving us the feedback of the barrels of crude that have been lifted on forward sales basis,” he said.
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He challenged the Nigerian National Petroleum Company Limited (NNPC) to provide details of the transactions, including the quantity of crude already lifted, the outstanding balance and whether the agreed deliveries had been completed.
“Today, can we get this from NNPC? How much have they lifted? What is the balance remaining? Have they been completed?” he asked.
Ambakederimo also questioned how the money collected upfront under the arrangements had been spent, demanding an explanation of its use.
“That money that was collected upfront, what was the use of the money? Can you justify it?” he asked.
He argued that Nigeria should make better use of its natural resources to accelerate infrastructure development and improve living conditions.
Citing land reclamation projects in the United Arab Emirates, Ambakederimo said Nigeria could explore similar opportunities to create additional land for residential and other developments.
He recalled seeing a signpost while travelling from Dubai to Abu Dhabi describing a project to reclaim land from the sea, using the example to highlight the development possibilities he believes Nigeria could explore.
The South-South Reawakening Group convener also argued that Nigeria could reclaim land in suitable areas, provided environmental concerns were properly managed.
He called for the country to translate its natural resource wealth into infrastructure and improved living conditions, stressing the need for greater accountability in crude oil transactions.
Oil output from the United Arab Emirates (UAE) rose to record levels in September, underscoring its resilience even amidst the Middle East crises and liberation from OPEC+ limits.
The International Energy Agency (IEA) issued the data in its monthly report, adding that Abu Dhabi raised total oil production, including condensates, by 400,000 bpd to 5.3 MMbpd.
According to the IEA, the UAE bolstered crude output to more than 4.4 MMbpd, nearing its maximum capacity, which surpasses the previous highs for total oil in August, and crude oil in June.
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The UAE has been one of the most successful among regional producers in restoring flows through the Strait of Hormuz, by drawing on a fleet of tankers to discreetly shuttle cargoes through the chokepoint and then transfer them onto other vessels. In addition, the country’s decision to leave the Organization of the Petroleum Exporting Countries (OPEC) as of May has freed it from the group’s output caps, a source of frustration for years.
Its gains contributed to a wider recovery in flows from Gulf producers, which reached more than 75% of pre-war levels in September, led by Saudi Arabia, according to the Paris-based IEA.
Still, it’s unclear how far the regional rebound has withstood a new wave of Iranian attacks on tankers transiting Hormuz, and escalating hostilities carried out by the Houthi rebel faction in Yemen.
The UAE depleted its observable above-ground inventories at a record pace of more than 270,000 bpd in September, drawing them to an all-time low, according to the IEA.
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