CAPITALDIGEST DAILY NEWS, 13/6/2023

FUEL IMPORTATION: MARKETERS DEMAND EQUAL ACCESS TO FOREX Oil marketers have projected that the ex-depot price of Premium Motor Spirit, popularly called petrol, would hit N515/litre once they source foreign exchange rate at the parallel market for the importation of PMS. Ex-depot price is the price marketers buy products at the depot and it determines the price at which they sell to motorists at filling stations. Dealers under the aegis of the Independent Petroleum Marketers Association of Nigeria called on the Federal Government to provide opportunity for marketers to start importing petrol by enabling dealers to have access to foreign exchange. Currently, the Nigerian National Petroleum Company is the sole importer of PMS into Nigeria, as other marketers stopped importing the commodity due to their inability to access the United States dollar. Marketers also stated that the ex-depot price of petrol by NNPCL Retail was currently N467.39/litre, and explained that this was because the national oil company was sourcing its dollars at a cheaper rate. “The exchange rate of N761/$ at the parallel market is what we are battling with as I’m talking to you right now, because that is where most marketers source their dollars. NNPCL’s ex-depot price is not realistic for other marketers, because they (NNPCL) source their dollar cheaper, which is at the N461/$ CBN rate. “So if any marketer is importing today, the cheapest ex-depot price that has been calculated for us is not less than N505/litre; some are as high as N511/litre, while others are as high as N515/litre,” an oil marketer, who pleaded not to be named to avoid victimisation, stated. Asked whether marketers had started importing PMS, the source replied, “We have not started. NNPCL is still supplying and they are asking us to come and pay the difference between the old price that they gave us, and the new price that they want to sell to us. Now they are selling to us based on the deregulated price.” Oil marketers stated that if the NNPCL should continue to access forex cheaper than other marketers, it would not be fair to private dealers, stressing that it was better everyone accessed the dollar at the same rate. FOREIGN TRADE DECLINES BY N2.6TN OVER FX SHORTAGE The total value of foreign trade has declined by N2.55tn as Nigeria recorded lower exports within a year, according to findings by The PUNCH. The new Foreign Trade Statistics Report by the National Bureau of Statistics showed that the total value of trade decreased from N14.6tn in the first quarter of 2022 to N12.05tn in Q1 2023. According to the report, Nigeria recorded N5.56tn import and N6.49tn export, showing a trade surplus N930bn in Q1 2023. On the value of import, the report read, “The value of total imports stood at N5.56tn in the first quarter of 2023, this represents a 3.67 per cent rise when compared with the value recorded in Q4, 2022 (N5.36tn) but declined by 25.83 per cent compared to the value recorded in the corresponding quarter of 2022 (N7.5tn).” According to the report, there was a decrease in the value of imports and exports. The value of exports decreased by 8.66 per cent from N7.1tn in Q1 2022 to N6.49tn in Q1 2023. The report read, “The value of total exports in Q1, 2023 stood at N6.49tn indicating an increase of 2.00 per cent when compared with the value of exports in Q4, 2022 (N6.36tn) but decreased by 8.66 per cent when compared with the first quarter of 2022 (N7.10tn).” It was also disclosed that there was a decline in the exports of manufactured goods, crude oil, oil products, energy goods, and raw materials goods in Q1 2023. Only the export of agricultural goods and solid minerals recorded an increase of 38.72 per cent and 32.17 per cent, respectively. The report read, “The value of agricultural goods exports stood at N279.64bn in Q1, 2023, this shows an increase of 63.92 per cent and 38.72 per cent compared to the value recorded in Q4, 2022 (N170.59bn) and Q1, 2022 (N201.59bn) respectively.” It added, “The value of solid minerals exports in Q1, 2023 was valued at N26.02bn indicating an increase of 23.73 per cent and 32.17 per cent compared to the value recorded in Q4, 2022 (N21.03bn) and in the corresponding quarter in 2022 (N19.69bn).” NIGERIA LOSES N150BN TO GAS FLARING IN 4 MONTHS Oil and gas companies operating in Nigeria flared 92.3 million standard cubic feet, mscf, of gas, worth an estimated N150 billion between January and April 2023, according to a report by the National Oil Spill Detection and Response Agency, NOSDRA. This represents an increase of 79.5 percent against 50.3mscf of gas flared in the corresponding period of 2022. According to the gas flare tracker obtained from NOSDRA, the 92.3mscf of gas flared in the four-month period of 2023 translated to a gas value loss of $323.1 million, about N150.08 billion (at CBN rate of N464.5 per dollar). Consequently, the oil producing firms responsible for this flaring are expected to pay penalties amounting to $184.6 million (an equivalent of N85.7 billion) for breaching the gas flaring laws in the four-month period. But judging from previous flare reports the oil firms are likely to pay the penalties soon as several billions of USDollars are still outstanding against the firms’ previously recorded penalty amounts for years now. The report also noted that the volume of gas flared in the four-month period is equivalent to 4.9 million tonnes of carbon dioxide emission and has a power generation potential of 9,200 gigawatts of electricity per hour. On a month-on-month basis, the report noted that in January, February, March and April, 23.2 mscf, 27.1 mscf, 25.9 mscf and 16.1 mscf of gas were flared respectively. The Petroleum Industry Act 2021 (PIA), the primary and comprehensive framework that regulates the oil and gas industry in Nigeria, signed into law by former President Muhammadu Buhari on August 16, 2021, provides a framework to regulate and gradually eliminate gas flaring in the country. Section 104 of the PIA criminalizes the act of gas flaring by any licensee, lessee or marginal field operator, except in three instances which include cases of emergency, exemption from the Nigerian Upstream Petroleum Regulatory Commission and when it is considered acceptable as a safety practice under established regulation. STOCK INVESTORS LOSE N37BN Investors on the Nigerian Exchange on Thursday lost N37bn due to losses recorded by Stanbic IBTC holdings (-3.02 per cent), Wapic (-6.52 per cent), GlaxoSmithKline (-5.30 per cent), FCMB (-2.17 per cent) and others. Both the All-Share Index and market capitalisation shed 0.12 per cent to close at 55,956.59 and N 30.468tn, respectively, as the year-to-date returns declined to 9.18 per cent. A total of 531,784,757 million units of shares were traded in 6,061 deals, 33.74 per cent higher than the previous session. The traded shares were worth N7.682bn, a 17.52 per cent appreciation to the previous day’s trading figure. Investors’ sentiments were mostly positive, resulting in 42 gainers and 13 losers. Etranzact, JapaulGold, Prestige, NSLTech, Sovereign Insurance and Unity Bank with a 10 per cent appreciation in their shares led the gainers, closing at N4.84, N0.44, N0.44, N0.33, N0.44 and N0.66 respectively. Other gainers included MRS which appreciated 9.96 per cent to close at N59.60 and Eterna, which added 9.80 per cent to close at N13.45. On the losers’ table was JohnHolt with a 9.68 per cent loss to close at N1.40, Caverton lost 7.14 per cent in its share value to close at N1.30 and Wapic closed at N0.43 after shedding 6.52 per cent of its share price.Topping both the value and volume charts was United Bank for Africa with 177.48 million shares worth N1.724bn traded in 506 trades. MTN Nigeria followed on the value chart with N1.203bn worth of shares traded on the NGX, Zenith Bank traded N863.314m worth of its shares in 306 exchanges and Airtel Africa sold 706,214 units of its shares valued at N810.289m in 88 deals. NET FOREX INFLOWS RISES 22% TO $5.15BN IN 2 MONTHS The net foreign exchange inflows through the economy rose year-on-year (YoY) by 22 percent to $5.15 billion in the first two months of 2023 (2m’23) from $4.22 billion in the corresponding period of 2022. Data from the Central Bank of Nigeria, CBN, Monthly Economic Report for February 2023 show aggregate forex inflow rose YoY by 1.7 percent to $10.94 billion in 2m’23 from $10.75 billion in 2m’22. However, the positive net position was boosted by a significant drop in total outflows YoY by 11 percent to $5.79 billion in 2m’23 from N6.53 billion in 2m’22. The data also showed that inflows through CBN rose YoY by 1.4 percent to $4.37 billion in 2m’23 from $4.31 billion in 2m’22. However, outflows through CBN declined by 2.6 percent to $4.76 billion in 2m’23 from $4.89 billion in 2m’22. According to the apex bank, net foreign exchange inflow through the economy increased month-on-month (MoM) by 5.2 percent to $2.64 billion in February from $2.51 billion in January 2023 due to increased inflow through CBN. CBN said: “Foreign exchange flow through the economy recorded a net inflow of $2.64 billion in February, compared with $2.51 billion in the preceding period. “Aggregate foreign exchange inflow into the economy increased by 7.2 per cent to $5.66 billion in February, from $5.28 billion in the preceding month. “Similarly, foreign exchange outflows rose by 9.0 per cent to $3.02 billion in February, from $2.77 billion in the previous month. “Foreign exchange inflow through the bank increased by 37.7 per cent to $2.53 billion, from $1.84 billion in January. Outflow through the bank rose by 7.0 per cent to $2.46 billion from $2.30 billion in January. “In contrast, autonomous inflow decreased by 9.1 per cent to $3.12 billion, from $3.44 billion in the previous month, while autonomous outflow increased to $0.56 billion from $0.47 billion in January“A net inflow of $2.56 billion was recorded through autonomous sources, compared with $2.97 billion in January “CBN recorded a net inflow of $0.075 billion, compared with a net outflow of $0.46 billion in the preceding month.”