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2 weeks ago
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- Filling stations nationwide are present expected to set their petrol pump prices successful the coming days
- Dangote Refinery's determination to halt selling substance successful naira, on with U.S. sanctions connected Iran, has changed the petrol marketplace dynamics
- Importers volition wage higher prices to bring petroleum products from abroad, and Dangote is present besides selling successful dollars
Dave Ibemere, a writer astatine Legit.ng, has been reporting connected concern for implicit 10 years. He has heavy cognition of the Nigerian economy, banal market, and wide marketplace trends.
Marketers are present expected to summation substance prices, with costs projected to scope astir N900 per litre.
The expected summation is owed to caller United States sanctions connected Iran, which person disrupted the planetary lipid supply, starring to a emergence successful crude lipid prices.
Source: Getty Images
Domestically, Dangote Refinery’s determination to halt the merchantability of petroleum products successful naira has further exposed the Nigerian marketplace to shifting planetary prices.
Why substance terms is acceptable to change
In the planetary market, Brent crude, the benchmark for Nigeria's oil, has risen to $72.16 per barrel, up from $71.75 per tube connected Thursday.
The summation successful lipid prices follows the U.S. determination to enforce caller Iran-related sanctions, targeting entities including a Chinese 'teapot' refinery for purchasing Iranian crude.
Iran, a large lipid producer, pumps implicit 3 cardinal barrels per day.
Phil Flynn, elder expert astatine Price Futures Group was quoted arsenic saying:
“We were looking for immoderate benignant of catalyst to move, and that was the summons that pushed america backmost towards the high."The interaction of rising crude lipid prices could person been little terrible if not for Dangote Refinery's determination to temporarily halt the merchantability of petroleum products successful naira.
From January to March, determination person been 3 terms reductions by Dangote Refinery.
Explaining its determination to halt income successful naira, Dangote said it is indispensable to debar a mismatch betwixt our income proceeds and our crude lipid acquisition obligations, which are presently denominated successful US dollars.
Part of the statement added:
"To date, our income of petroleum products successful Naira person exceeded the worth of naira-denominated crude we person received. As a result, we indispensable temporarily set our income currency to align with our crude procurement currency."
Source: Getty Images
Depots set prices
Already, In Nigeria, the surge successful crude prices has led to accrued costs astatine substance depots.
Petrol loading prices roseate to N875 per litre connected Thursday from N852 earlier successful the day, according to information from BusinessDay.
Major depots specified arsenic Matrix Warri, Zamson, Rainoil, Pinnacle Warri, and Sobaz adjusted their prices upwards.
This marks a displacement for Nigerian consumers, who had seen 3 terms reductions by Dangote Refinery since January. The refinery precocious suspended income of petroleum products successful naira, citing challenges successful aligning gross with crude procurement costs, which are denominated successful U.S. dollars.
J.P. Morgan expects Brent prices to hover successful the mid-to-high $70s.
The accommodation successful planetary lipid prices means importation volition beryllium much expensive, and with Dangote nary longer providing respite, substance prices could instrumentality to supra N900 per litre.
Oil marketers contradict opposing NNPC, Dangote petrol price
Earlier, Legit.ng reported that the Independent Petroleum Marketers Association of Nigeria has denied claims that it opposed the caller simplification successful petrol prices.
The Dangote Refinery and the Nigerian National Petroleum Corporation Limited precocious reduced petrol pump prices.
There person been reports that lipid marketers are unhappy with the simplification owed to the losses they incurred from the terms changes.
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Source: Legit.ng
