Fresh fuel crisis looms over dollar shortage

Nigerians may witness another round of fuel crisis soon following complaints by importers of petrol about scarcity of dollars to bring in the product.

They also claimed that the Nigerian National Petroleum Corporation had not promptly signed agreements to exchange crude oil for fuel.

Similarly, the fuel marketers said that the inability to access adequate foreign exchange from the banks was hampering fuel importation.

Already, fuel queues by motorists and other people have surfaced in some parts of Lagos and other cities.

The NNPC had recently increased its direct petrol imports to more than 70 per cent of the country’s needs, leaving the private importers with less than 30 per cent.

The Executive Secretary, MOMAN, Mr. Obafemi Olawore, in a telephone interview with our correspondent on Thursday, said, “Foreign exchange is the issue everybody is facing. We are unable to access enough forex at the same time. We accumulate over a period of time. Now, the commercial banks are giving us in trickles.”

As explained by the NNPC, the reason why they took a higher percentage (of fuel importation) was that its access to forex was flexible, he said.

Olawore said, “I believe that government should encourage the private sector to import more because we have more of the facilities and other logistics to bring in and distribute. We control most of the storage and distributing channels and we are not bringing in enough.

“The NNPC alone, even if it can bring in everything, doesn’t have where to discharge it. So, even if the supply is enough, distribution will pose as a challenge.”

When contacted for comment on the issue of forex scarcity, The Director, Corporate Communications Department, CBN, Ibrahim Mu’azu, who noted that forex inflow had reduced, said, “The position of the CBN is to give them (marketers) priority on access and that has been made over time.

“They all buy from the interbank, and not directly from the CBN. The CBN is only intervening at the interbank when the need arises. They apply for forex from their banks.”

The NNPC signed deals last year with refiners, Total, Varo Energy, Cepsa and ENI, to exchange oil directly for petrol and other products beginning in February.

Companies including Litasco, Noble and Total had secured “spot” swap contracts with the NNPC via local joint ventures in February and March. Sahara, an old hand in the swap deals, also won spot swap deals in March.

The Group General Manager, Group Public Affairs Division, Mr. Ohi Alegbe, said the NNPC had adequate stock of products, adding that there was no cause for worry.

“There are no issues. Before now, it was about 50 per cent that was allocated to the NNPC, but somehow the government came and said the NNPC should bring 65 to 70 per cent so that we do not get embarrassed the way we were around December.”

Alegbe said the corporation was working to expand its retail and storage capacity. “By March, we are opening some storage facilities in Mosimi. We have started fixing them and others across the country.”

Nigeria’s crude oil languishes, waits for buyers

While Asian traders were mopping up Angola’s crude oil, Nigeria’s crude remains in ample supply, languishing as it waits for buyers.

According to Reuters, Nigeria’s Erha programme surfaced after weeks of delays that traders said related to a disagreement between state oil firm NNPC and the field operator, Exxon-Mobil.

* Programmes for Erha were issued after several weeks of delay. Four cargoes will be loading in March and three in April, the programmes showed.

* NNPC also issued its official selling price for Erha in March at 9 cents above dated Brent, up from a 17 cent discount in February.

* About 15 March-loading Nigerian crude cargoes are still available, traders said, and a force majeure on Forcados exports was doing little to boost differentials for most grades.

* Bonny Light for April loading was offered at dated Brent plus $1.50 per barrel and Bonga at a $1 premium.

Naira Continues Gains Against Dollar, Trades At N250

The fortunes of the American greenback against the Nigerian Naira has continued to plummet even as the Naira has firmed up it’s value and is currently trading at N250 to $1.

SUN reported The Acting President of the Association of Bureau de Change of Nigeria (ABCON), Aminu Gwadabe, as saying the market was reacting to President Muhammadu Buhari’s ‘no devaluation’ stance.

He, however, expressed ABCON’s support for President Buhari not to allow further devaluation of the naira.
Gwadabe, who said the association was in partnership with the authorities to step up efforts to rid the market of illegal currency traders stated: “Like the President indicated recently, since the only significant thing we export is crude oil, devaluation will do more harm to the economy than good. So we also say no to further devaluation of the naira!” he stated.

He also affirmed ABCON’s backing to ensure its members comply with the Central Bank of Nigeria’s regulation as well as operate within the approved margin of 3.5 per cent with the hope that the demand and supply situation would improve to restore calm and stability in the market.

Satchet water sellers in FCT protest hike in price

Sellers of sachet water popularly known as ‘’Pure Water’’ today took to the streets of Kubwa village of the FCT in protest against increase in the cost price of the product by whole sellers.

They further argued that if the situation was not addressed urgently, they could be out of business. A protester, Yusuf lamented that the product, which hitherto sold for N100 per bag, now sells between N140 and N150.

He said they witnessed low patronage in the past weeks. “Now that we sell at N15 and N20, people who drank five or more sachets have reduced their patronage, unlike when we sold at N10 per sachet.

Lamenting that it was unbearable for them to sell at the new price and still make profit, some of the protesters interviewed threatened to increase the price per sachet from N10 to N20 if nothing was done by the authorities to reverse the trend. “The turnover is poor and at the end of the day, what we take home is not commensurate with the stress.

We are in a season where people don’t drink much; the rains are here and people don’t seem to be thirsty like they are during the dry season. “We pay levy of between N20 to N50 every day before we are allowed to sell in motor parks and with the current situation, things are beyond our limit”.

Another hawker, Mrs. Cynthia Ikwumezie said problem started when producers went on strike for alleged rise in price of water proof used in packaging the product. The protesters called on the state government to address the situation.

They pleaded that government should abolish the tolls they pay in the parks. A bag of sachet water which sold for N100 now sells for between N140 to N150, while roadside retailers sell at N15 per sachet as against the previous N10.


Some sachet water dealer attribute the problem to alleged rise in price of water proof used in packaging the product.

Senate orders arrest of former EFCC Chairman, Ibrahim Lamorde

 Senate has commenced moves for the arrest of former Chairman of the Economic and Financial Crimes Commission, Ibrahim Lamorde, for alleged financial crimes and corruption.

The resolution was reached today in plenary after Chairman, Senate Committee on Ethics, Privileges and Public Petitions, Sam Anyanwu, presented its report at today’s plenary.

In its recommendations, Senator Anyanwu, urged the Senate leadership to direct the Inspector-General of Police, Solomon Arase, to issue a warrant of arrest to ensure Lamorde appears before it to defend himself. 

In his contribution,Deputy Senate President, Ike Ekweremadu, citing sections 88 and 89 of the constitution, explained that taking a resolution for Lamorde’s arrest in plenary will be a constitutional breach.  .

Recall that the former EFCC boss had on three occasions between August and November, 2015, failed to appear before the senate despite several invitations to answer to a petition filed against him by one Dr George Uboh and while reports says he may be far away in the Caribbean.

Naira appreciates against the dollar to N240

The Naira rose against the dollar in the parallel market to N240 from N310, before the close of business yesterday, while the official Central Bank of Nigeria rate remained unchanged at N197. The rise of the Naira defied speculation of further depreciation to about N450 this week after reaching an all-time low of about N400 to the dollar in the parallel market last week.

There has been widespread belief that the Naira appreciation is somehow due to Dr. Ifeanyi Ubah, the CEO of Capital Oil, after his statements on national television on Sunday, where he claimed that he could restore the value of the Naira to 200 in 30 days. He said, further, that the decrease in the value of the dollar has been largely artificial and due to manipulation by certain people.

Surprisingly, the Naira appreciated in the parallel market and is currently hovering around 310 to 340 Naira.

Contrary to this popular belief, Mr. Kunle Ezun, Currency Strategist in Ecobank Nigeria, attributed the rise of the Naira to President Buhari’s defiance on devaluation and the decision of the Bureau De Change (BDC) operators to peg their profit margin at 3.5 percent.

In a bid to ensure further appreciation of the Naira and enhance transparency in the the BDC sub-sector, the chairman of the Association of Bureau de Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, revealed plans to introduce a foreign exchange rate band weekly, which would be announced via press releases.

The forex market appears to be moving from perception to reality as the weekly forex rate band will serve as a guide for all BDCs and help curb further exploitation of forex end users, he added.

Only time will tell whether or not Dr. Ifeanyi Ubah is the saviour of the Naira, or just a mere coincidence that the Naira appreciated after his statements.

IMF calls on Nigeria to lift foreign exchange curbs

The International Monetary Fund (IMF) called on Wednesday for Nigeria to lift foreign exchange curbs and let the naira reflect "market forces" more closely, also urging more fiscal discipline and structural reform to bolster growth.

President Muhammadu Buhari has rejected a naira devaluation and backed hefty restrictions imposed by the central bank to prevent a collapse of the naira as Africa's biggest economy is whacked by a slump in oil revenues, its lifeblood.

Companies have laid off thousands, cut production and even closed operations as they struggle to get enough dollars to pay for imported spare parts and raw materials.

The naira is trading as much as 40 percent below the official rate on the black market. Devaluation would encourage investment and make domestically produced goods more affordable.

"The exchange rate should be allowed to reflect market forces more and restrictions on access to foreign exchange removed, while improving the functioning of the interbank foreign exchange market," the Washington-based fund said in a statement, after consultations with top officials in Nigeria.

Currency curbs had "significantly" affected parts of the private sector and the economic outlook for Africa's top oil producer was "challenging", it said.

Nigeria needs to import anything from milk to machines as authorities have failed to end its dependency on oil, a fact Buhari wants to change but which business leaders say will be impossible to achieve if plants cannot import raw materials.

The IMF also said it expected the West African nation to grow by 3.2 percent this year, below the official forecast of 3.78 percent. It urged boosting non-oil revenues, raising infrastructure spending and collecting more taxes.