By Prince Okafor
Globally, the International Oil Companies, IOCs and their indigenous counterparts are smiling to the banks as crude oil price hits the roof at $80 per barrel.
The government of many nations, including Nigeria, Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Kuwait, Libya, Qatar, Saudi Arabia and Venezuela are also pleased as they have more funds to finance their projects and programmes.
The National President of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Chinedu Okoronkwo said: “There is problem in the crude oil market globally, the Iran issue and United States pulling out of an international nuclear deal with Tehran has added to the upward pressure. When the crude is high, it will affect everything.”
But the development has started to impact negatively as the prices of some petroleum products which are deregulated by the government continue to rise in the domestic market.
Take Nigeria as an example. A market survey by Vanguard over the weekend in Lagos showed that the prices of diesel and kerosene have increased from N215 to N240 and N217 to N222 per litre respectively.
A visit to Ibeto, Ibachem, Sahara and African Terminal showed that the depot price of diesel stood at N225 per litre, up from N213.5 recorded the previous week.
The survey also showed that at MENG, Emadeb, WOSAB and AA Rano, the depot price of the product stood at N223.5 per litre.
Mr. Okoro Maduka, a marketer at Ibeto depot said: “Every Salah period is like this. Just last week, we managed to buy diesel here at N213.5, now it has risen to N230 per litre. Who knows what it will be like next week?”
However, the National Bureau of Statistics, NBS indicated that the average price paid by consumers for automotive gas oil (diesel) decreased by one per cent month-on-month and 10.86 per cent year-on-year to N204.35 in April 2018 from N206.41 in March 2018.
“States with the highest average price of diesel were Taraba (N250.00) Adamawa (N227.50) and Sokoto (N224.00). States with the lowest average price of diesel were Oyo (N191.28), Delta (N190.77) and Bayelsa (N188.33),” it stated.
Prices to rise further – NNPC
The Nigerian National Petroleum Corporation, NNPC, said that as the price of crude oil in the international market goes up, prices of petroleum products that come out of it will automatically rise.
In an interview with Vanguard, the Group General Manager, Group Public Affairs Division of the NNPC, Mr.Ndu Ughamadu said: “The price of crude has been rising in the international market. This has affected the price of diesel because crude oil is the main raw material in the production of diesel.
“If the price of crude oil continues to rise, the price of diesel will also continue to rise, depending on industrial activities in the western world, the more industrial activities increase, the more the consumption of diesel.
“During the refining process, more than 20 products come out at various temperatures, ranging from cooking gas, diesel, petrol, kerosene, aviation kerosene and so on, these are by-products of refining.
“NNPC is currently rehabilitating three of its refineries to increase its refining capacity to 90 per cent. In that case, we will produce more diesel for local market, thus causing prices to drop.
“Also, the Federal Government has issued licences to several entrepreneurs. Hopefully, more refineries will come up, and the more we refine locally, the better for the nation.’’