The Nation Newspaper

Tag: price

  • Gala Sausage Roll and competitors: Brand Vs price

    Produced by UAC Foods, Gala Sausage is an on-the-go snack, taken by many as a lunch-meal when with a chilled drink. However, the market experienced new entrants some years back, as it is evidenced that the product category has the demand and volume that drives millions of naira in revenue daily.

    The product category gets value from millions of Nigerians who budget N100 for a mid-day snack-meal: N50 for sausage roll and N50 for bottle water. This market is about wallet share and thrives on low price and big sizes.

    For some of the target consumers, what matters is for the sausage roll to fill their stomachs while they are on their way home from work or to serve as in-between-work meal. Thus, price matters and not the brand.

    Biggy, produced by Rite Foods, is actually big in size, its proposition would be the satisfaction of the hungry man. Super Bite, produced by Chi is very tasty and spicy.

    Meaty fills the gap for those consumers who are missing the original size of the beef inside of Gala. Biggy, Super Bite and Meaty sell for N50 each. Gala sausage rolls come in two packages, Gala Mini and Gala Mega; and they sell for N50 and N100 respectively. Thus the target of Gala Mega would be the consumers who are willing to spend N200 on a snack meal: N100 for the sausage roll and N100 for a bottle of soft drink.

    Gala chose to reinforce its brand essence, rather than engaging competitors in a price war. This seems to have kept Gala shielded from competition.

  • Petrol prices to fall, says Kachikwu

    Petrol prices to fall, says Kachikwu

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu on Thursday said that owing to the competition inherent in the Premium Motor Spirit (PMS) price modulation, the product’s prices will crash  in the next four to six months.
    He urged Nigerians not to undermine the present prices of the product, stressing that a look at the prices of the diesel which are now 40% down and recording surplus supply is enough evidence that the petrol prices will also crash.
    Presenting his scorecard on his two years in office in a podcast released to reporters in Abuja he said that “once Nigerians throw their trading skill in, once competition thrives, the prices will continue to tumble.
    ” My guess is that you will see the prices tumble in the next four, five to six months. The market will be more stable and definitely the prices will be lower than what we see today.”
    Still capturing hope in the petroleum downstream sector, he said that in the last 10 years, this is the first time that the three refineries are working simultaneously, although at 50 % of their capacity.
    “We expect to put in investment to put them to 90% capacity,” he said.
    Kachikwu said that this is the first that the NNPC group of companies are recording savings which could be used to address the issue of the refineries alongside the Joint Venture Partners.
    The minister noted that this is the first time the government is upgrading the depots to extent that of the 19 only three are not functioning at the moment.
    He said this is the first time that a government is considering the replacement of the 35 year old pipelines.
    It has been one massive problem after the other in order for the sector to stabilize in term of product supply in the country.
    Kachikwu however submitted that but “the time has come to take on the problem bullishly and that is what we are trying to do. So, we believe the ire will be money for infrastructural development in the downstream sector.
    “We believe that a lot of the companies will jump up now and be able to sell at the right prices and not the pump down by the problem of price control and will be able to grow their businesses. We believe that most of them efficient ones will drive prices southward  rather than northward.
    “And we believe that almost 200,000 jobs will be created in this sector and over 400,000 jobs will be saved which would have been lost if we had continued on the path we were in.”
    He revealed that on assumption of office two years ago, he inherited a debt of N600billion owed to marketers of Premium Motor Spirit (PMS) which the  federal government settled.
    He recalled that they seized importing the products prior to the payment of their debt.

  • Venezuela’s chaos can spark oil price increase

    Deepening turmoil in Venezuela could fuel a rise in oil prices, a feat the Organisation of the Petroleum Exporting Countries (OPEC) has been striving to achieve through oil production cuts.

    According to MarketWatch report, the South American nation, home to the world’s largest oil reserves, voted to give President Nicolás Maduro’s government powers to redraft the constitution, sparking clashes between protesters and state security forces. The opposition charges the vote could mark the end of democracy in Venezuela.

    What the chaos portends for the oil industry, the report said: “The “possibility of chaos” in the country is the “only true element that would change the dynamic for crude,” Tom Kloza, global head of energy analysis at Oil Price Information Service, said.

    “If “Vendemonium,” as he dubbed it, comes to pass, it could lift West Texas Intermediate crude-oil prices up from their current trading range of roughly $42 to $53 a barrel, said Kloza.

    WTI crude, the U.S. benchmark, traded just below $50 a barrel last week, contributing to a 8.7 per cent weekly gain fueled in part by data showing a fourth-straight weekly decline in U.S. crude inventories, as well as pledges by some OPEC members to curb exports.

    But WTI crude and Brent, the global benchmark, still trade about eight per centlower year to date, even as a production-cut agreement by OPEC members and other major non-cartel nations such as Russia, that began at the start of the year, has seen historically high compliance and has been extended through March of next year.

    “For oil, there is “ongoing concern about stability as the opposition gains strength and the chance that the U.S. will ratchet up pressure by halting imports,” James Williams, energy economist at WTRG Economics told MarketWatch. Venezuela is among the top suppliers of crude to the U.S., though its production has declined since last year on the heels of civil unrest.

    “Venezuela’s oil output has dropped over the last year. A long strike by Venezuelan national oil firm’s workers was to blame for the huge drop in 2003. The chaos intensified last week with the U.S. State Department ordering family members of U.S. embassy employees in Caracas to leave the country.

    “If we are removing diplomats, it is certainly an indicator of the intent to embargo oil from Venezuela,” said Williams. The U.S. had placed sanctions last week on 13 high-ranking Venezuelan officials for alleged corruption, among other offences, according to The Wall Street Journal.

    “If Maduro installs puppeteers who more or less make up new constitutional rules, it really puts an already beleaguered (U.S. President Donald Trump) administration in a tough spot,” said Kloza.

    Still, if the Trump administration “tries to put financial handcuffs” on Venezuela’s state-owned Petróleos de Venezuela, SA, (PdVSA), “it might provide the catalyst for the oil market and for consumer gasoline prices to rise appreciably,” Kloza said.

    And the impact could be far reaching, with “financial handcuffs or penalties” potentially signaling “incredible turbulence for Citgo,” he said.

    Citgo Petroleum Corporation, the Venezuela-owned American refiner, employs thousands of U.S. citizens and is “instrumental in ensuring adequate supply of gasoline, diesel fuel and jet fuel,” said Kloza.

    In Russia, integrated oil firm Rosneft, which is majority owned by the country’s government,” might ultimately gain a large ownership stake in Citgo should its parent company and country default,” he said.

    Rosneft received 49.9 per cent of the equity in PdVSA unit Citgo late last year as collateral for a $1.5 billion loan to PdVSA. Reuters recently reported that Rosneft is in talks with PdVSA for a fuel-supply deal and stakes in Venezuela-based oil and natural-gas fields.

    For now, traders can just “hope that Trump only target individuals, not oil” when it comes to sanctions, said Williams.He also warned that the market could see a reaction from the U.S. that is “more complex than a simple halt in imports.

    Meanwhile, Kloza said that if Venezuelan crude continues to flow, there is “limited upside” for the oil market “despite the large inventory draws that have happened and will continue to happen for some time.”

    “Without ‘Vendemonium,’ we’re destined to remain in a low-price oil environment into 2018 or later,” said Kloza.

     

  • ‘NNPC intervention crashes diesel price by 42%’

    ‘NNPC intervention crashes diesel price by 42%’

    The Nigerian National Petroleum Corporation (NNPC) has said it has crashed the price of Automotive Gas Oil (AGO), also known as Diesel, to about 42% nationwide.

    Its Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, said this in a statement yesterday.

    Ughamadu said the price cut was a huge downslide over the last six months, following key strategic interventions by the NNPC.

    In the first quarter of this year, retail prices of AGO, which is one of the deregulated products, shot to an all-time high of N300/litre in major demand centres across the country.

    He, however, said following strategic intervention efforts by the NNPC towards sustained improvement in the supply of the diesel, the product’s retail prices as at the end of May 2017 ranged from N175 to N200 across the country (a significant price drop of about 42%). Ex-depot prices also dropped to between N135 and N155, Ughamadu said.

    Shedding more light on the achievement, the NNPC spokesperson said some of the corporation’s strategic interventions include improving the supply of AGO and remodeling of the product distribution to address sufficiency issues across the country.

    “Since January this year, we have worked very hard with relevant stakeholders to improve distribution from refinery depots, by implementing a robust loading programme,” he affirmed.

    The corporation was also able to resuscitate its critical pipelines and depots in places such as Atlas Cove-Mosimi, Port-Harcourt Refinery-Aba and Kaduna Refinery-Kano.

    “Efforts are also ongoing to revamp and commission other critical pipelines across the country,” he said.

    Another key intervention that has enhanced supply and distribution of diesel, the NNPC spokesperson noted, was the corporation’s robust engagement with critical downstream stakeholders, where salient issues were raised and duly addressed.

    These stakeholders include: Major Oil Marketers Association of Nigeria (MOMAN), Nigerian Association of Road Transport Owners (NARTO), Petroleum Tanker Drivers (PTD) as well as Independent Petroleum Marketers.

    He added that as a result of consistent positive engagement with the Central Bank, NNPC extended the expansion of Premium Motor Spirit (PMS) Foreign Exchange Intervention Scheme to accommodate diesel and aviation fuel.

  • Oil price slumps on oversupply

    Oil price slumps on oversupply

    Oil prices dropped to six-week yesterday, under pressure from high global inventories and doubts about the Organisation of Petroleum Exporting Countries (OPEC’s) ability to implement agreed production cuts.

    Brent crude oil LCOc1 fell 30 cents to $46.70 a barrel, its weakest since May 5 and just above six-month lows, before recovering a little to trade around $46.90.

    United States (U.S.) light crude CLc1 was down 25 cents at $44.48, also not far off six-month lows.

    Both crude benchmarks have lost all the gains made at the end of last year after the OPEC agreed with other big producers to cut output in an effort to prop up prices.

    OPEC and its allies have promised to restrict output until at least the end of the first quarter of next year to try to drain surplus supply.

    But inventories are near record highs in many parts of the world, and many traders expect further price falls.

    Analyst at London brokerage PVM Oil Associates, Stephen Brennock, said: “Oil prices are pinned near their lowest level in seven months,” adding that the market showed “little in the way of upside potential”.Crude prices have fallen about 12 percent since May 25, when OPEC agreed to extend its output limits into next year.

    Despite the deal, some OPEC members, including Nigeria and Libya, have been exempt from cutting and their rising output is seen to be undermining efforts led by Saudi Arabia.

    Despite the deal, some OPEC members, including Nigeria and Libya, have been exempt from cutting and their rising output is seen to be undermining efforts led by Saudi Arabia.

    “OPEC 2017 year-to-date exports are only down by 0.3 million barrels per day (bpd) from the October 2016 baseline,” analysts at AB Bernstein wrote.

    OPEC’s pledge was to cut some 1.2 million bpd, while other producers including Russia agreed to bring the total reduction to almost 1.8 million bpd.

    But production in the U.S., which is not part of the deal, has jumped 10 per cent over the past year to 9.33 million bpd.

    “Production growth in Libya and Nigeria and continued rig additions in the U.S. are complicating the picture, raising doubts on OPEC’s strategy,” AB Bernstein said.

    The U.S. government’s Energy Information Administration has raised its forecast for domestic output growth in 2017 to 460,000 bpd from a predicted decline of 80,000 bpd in December.

    OPEC now expects U.S. production to increase by 800,000 bpd this year. This suggests global oversupply will persist for a while.

    The International Energy Agency (IEA) says it expects oil supplies next year to outpace demand despite consumption hitting 100 million bpd for the first time.

  • ‘No fuel price hike now’

    ‘No fuel price hike now’

    The Petroleum Products Pricing Regulatory Agency (PPPRA) has dismissed as untrue speculations of planned fuel price increase by the Federal Government.

    According to a statement by the Agency’s spokesman, Lanre Oladele, the Executive Secretary, Abdukadir U. Saidu, said the PPPRA has observed the growing speculation on a purported imminent increase in the pump price of Premium Motor Spirit (PMS) by N5.00 per litre.

    The Agency, he noted, wished to dispel the rumour and assuage the concerns of Nigerians. “As the Agency of government saddled with the responsibility of regulating petroleum products pricing, supply and distribution, we want to assure the Nigerian public that the subsisting pump price cap for PMS remains N145 per litre, across the country and as such, Nigerians should please ignore the speculation on price increase.

    “We again wish to assure all Nigerians that pursuant to its mandate, the PPPRA shall not fail in its efforts geared towards ensuring products availability, and at regulated price, for the benefit of all.”

  • No plan to increase fuel price, says Senate panel chair

    •CNPP backs labour, students

    The National Assembly has denied any plans to increase the pump price of Premium Motor Spirit (PMS) by N5, saying such an action has not been discussed on the floor of the Senate.

    Senate Committee on Works Chairman Kabiru Gaya (APC-Kano) made the clarification in an interview with reporters in Abuja at the weekend.

    But despite the clarification, the Conference of Nigeria Political Parties (CNPP) threw its weight behind Nigeria’s organised labour over the “planned increment”.

    CNPP accused the National Assembly of taking more anti-people decisions than resolutions that could better the lives of the already impoverished masses.

    Gaya, however, said information about the “Road Fund Bill” proposed by his committee was misinterpreted, saying that those speculating it are creating negative perception in the hearts of the people against the Senate.

    The senator, who accused some persons of trying to make mountains out of mole hills, said the misinformation on the proposed bill was an attempt aimed at denting his image and that of the President Muhammadu Buhari’s administration by mischief-makers, who should rather educate the public on the true position of the bill.

    He said: “They said the Senate is increasing fuel price? That was wrong! They don’t even understand what we are talking about. In the last seven years, I have been in the Senate. There was a N5 levy for which the Petroleum Pricing Regulatory Agency (PPRA) was supposed to be deducted, not to increase, even when pump price was sold at N87 per litre from the amount sold and remit to FERMA to maintain roads.

    “From our calculation, PPRA has not paid N167 billion to FERMA. I raised this issue then and wanted to continue this time again that the same N5, which was supposed to be paid before and they didn’t pay and now should also be deducted and removed from the N145 not to increase.

    “People are complaining because they don’t know the challenges before we in the Committee of Works. We have a lot of work to do because there are about 34 projects that were not included in the 2016 budget. But we make sure that they are now included in the 2017 budget.

    “They were in 2016 budget but were shortchanged and the Buhari administration approved these jobs, but they were not in the contracts in the budget. So, we said there is no way the executive council will approve a project and it’s been announced and it is not included in the budget.

    “The Committee of Works said these projects should be included and we commended the Senate President and the Speaker of the House, who ensured that those projects are included in the budget.”

    But the CNPP, in a statement by its Secretary General, Chief Willy Ezugwu yesterday, said: “We assure the Senate and the Federal Government that their proposed N5 per litre of fuel tax will be resisted.”

    The Alhaji Balarabe Musa-led umbrella body of all registered political parties and associations in Nigeria also warned the Presidency of the imminent consequences of adding to the pains of the ordinary people of Nigeria by raising the pump price of fuel under any guise.

    “Our findings have shown that the bill titled: ‘National Roads Fund (Establishment, etc) Bill 2017’, proposing that N5 to be paid per litre of fuel imported into the country is a ploy by the Federal Government to impose more hardship on Nigerians at a time the burden of recession in the country is becoming unbearable.

    “We thought that the Federal Government should be thinking of reducing the already biting hardship in the country after failing to fulfil the promised increment in minimum wage and non-payment of arrears of workers’ salaries and allowances in the past two years.

    “It seems that the current government at the federal level and their National Assembly collaborators enjoy inflicting more and more pains on Nigerian masses.

    “We wonder why the Senate Committee on Works in its final report on the bill would make such proposal.

    “Are they saying that the only way this government can raise funds is by increasing pump price of petroleum prices and punishing the masses?” the CNPP queried.

    The Nigerian organised labour, students and others have vowed to resist any attempt by government to indirectly or otherwise introduce a hike in the pump price of fuel, given the country’s economic hardship.

  • Fertiliser price crash reignites hope for agric

    Fertiliser price crash reignites hope for agric

    The Federal Government’s plan to end food import by 2019 is on course. Its agreement with Morocco on the production of fertliser has started yielding results. The deal may have given fillip to using agricuture to drive economic diversification. Assistant Editor CHIKODI OKEREOCHA reports.

    For long, the greatest pain in the neck of local farmers remained the non-availability of fertiliser. Where the critical input was available, its price was beyond farmers’ reach, selling sometimes as high as between N9, 000 and N10, 000, depending on the location.

    Rural farmers naturally paid more because of the added cost of transporting the product from the city centres to the rural areas.

    Expectedly, this was a major disincentive to farmers wishing to embark on small, medium and large scale agriculture. It was also, by extension, a stumbling block on Federal Government’s plan to halt the importation of food by 2019. Besides, without timely supply of quality fertiliser in adequate quantities and in a cost–effective manner to rural areas, hope of anchoring the ongoing economic diversification agenda was under threat.

    But the situation may have started changing. This was on the strength of the signing of a Memorandum of Understanding (MoU) between Nigerian and Morocco for the supply of phosphate to rejuvenate agriculture by making fertiliser available and affordable. The deal, consummated last December, for the production of one million tons of fertliser, has started pushing possibilities into the hands of farmers and operators the local fertiliser industry.

    For instance, it has forced down the price of fertiliser from between N10, 000 and N11, 000 to as low as N5, 000. The drastic price slash was sequel to the arrival of the first consignment of fertiliser into Nigeria from Morocco early this year. The product was delivered to various blending plants across the country, even as more cargoes are expected  soon.

    Nigerian National Petroleum Corporation (NNPC), Group Managing Director, Dr. Maikanti Kacalla Baru, who made this known recently, said that 11 blending plants across the country have started production because of the supply. This was when he received the National Coordinator of the New Partnership for African Development (NEPAD-Nigeria), Princess Gloria Akobundu, at the NNPC Towers in Abuja.

    The NEPAD National Coordinator was at the NNPC to seek for areas of collaboration with the Corporation especially in the area of promoting regional integration on the continent. “As NEPAD, we are mandated to identify and work with strategic partners to facilitate, monitor and promote the implementation of developmental projects across the continent,” Akobundu said.

    The NNPC told his visitors that apart from being a huge boost to the  agricultural sector and the economy, the Nigerian, Moroccan deal was expected to boost bilateral relationship between both countries, in line with NEPAD’s objective of championing regional economic ties and integration.

    The Nation learnt that the Nigerian, Moroccan fertiliser deal, which gladdened the hearts of farmers, including Minister of Agriculture and Rural Development Chief Audu Ogbeh, was anchored by the Fertiliser Producers and Suppliers of Nigeria (FEPSAN) and OCP Group, a Moroccan company. OCP specialises in phosphate and its derivatives, and is committed to the development of agriculture in Africa.

    The MoU was signed during the visit of King Mohammed VI of Morocco to Nigeria by FEPSAN President Mr. Thomas Etuh and OCP Group Chairman and Chief Executive Officer Dr. Mostafa Terrab. Essentially, the agreement was for the promotion of innovation aimed at contributing to productivity-led agricultural growth and improving farmers’ income.

    Recall that the Federal Government had set up the National Fertiliser Technical Committee under the Federal Ministry of Agriculture and Rural Development. The Committee was mandated to seek ways of putting the country on the path of sustainable production of quality fertiliser for both local consumption and export.

     Why the deal was imperative

    According to experts, Nigeria’s fertiliser industry has a blending capacity of four million tons of Nitrogen, Phosphate, and Potash (NPK) annually. The country’s production capacity for Urea was put at about two million tons yearly, with capacity to employ over 250,000 people in both direct and indirect jobs.

    The snag, however, is that less than 10 per cent of these production capacities are being utilised. This was what prompted the Federal Government to intervene in the fertiliser industry hence the deal with the Moroccan Government.

    The deal covered such areas as securing a supply of quality fertiliser by bringing in raw materials required for the production of the item in line with the crops and soils adaptable to Nigeria; strengthening blending capabilities by leveraging on technical know-how and engineering capabilities.

    It also sought to strengthen the capacity to ensure a timely supply of quality fertiliser in adequate quantities and in a cost–effective manner to rural areas, as well as an efficient supply chain and improvement of logistics management, including warehousing and transportation services; and strengthening the agricultural extension services system.

    One deal, multiple agains

    Apart from forcing a drop in the cost of fertiliser and boosting farmers’ productivity and income, the deal, according to the NNPC boss, has created about 50, 000 jobs.

    “Already, 11 blending plants have come into production because of the supply. This development has translated to the creation of about 50, 000 jobs and led to the production of about 1.3 million tonnes of fertiliser in the country,” Baru said.

    Some of the fertiliser plants that has come on stream following the intervention include the Ebonyi State Fertiliser Company, Golden Fertiliser Company, Lagos, Superphosphate Fertiliser and Chemicals, Kaduna, Bejafta Fertiliser Company, Plateau among others.

    The NNPC chief also said the Moroccans had given Nigeria a generous credit term of 90 days and that they were planning to bring in more cargoes that would fit the various blending plants in the country.

    The thinking of experts and operators in the agric sector is that when the next consignment of fertiliser arrives the country, more blending plants will kick-start production. This will not only create more job opportunities in the agric value chain, but also give more impetus to government’s push to end food importation by 2019.

    Already, following the arrival of the first consignment, the Kano State Government was said to have procured 50, 000 metric tons worth N5 billion to be distributed to farmers across the state. Same for Jigawa State Government, which purchased about 4, 000 bags of the farm input for its farmers.

    More states governments across the country have also indicated interest to purchase fertiliser for onward distribution to farmers. This would ultimately save Nigeria the huge foreign exchange for fertiliser import and food.

  • Don seeks price control

    Don seeks price control

    Obafemi Awolowo University (OAU), Ile-Ife,  Vice Chancellor Prof Anthony Elujoba has called for tighter regulation of food commodity prices to help entrepreneurs.

    He gave the advice at the Annual In-House Review Exercise of the Institute of Agricultural Research and Training(IAR&T), Moor Plantation, Ibadan, Oyo State.

    The yearly review is done to appraise the institute’s challenges, achievements and prospects.

    Represented by the Provost, Post-Graduate College, Prof. David Alebiowu, Elujoba said farmers were taking many risks in marketing their products, urging the government  to  take a hard look at its potential impact on food prices volatility.

    He said: “The government must also standardise price control because local market volatility is the biggest threat to entrepreneurs in agriculture. The farmers are taking a lot of risks in marketing their products due to  unstable prices.”

    IAR&T Executive Director Professor James Adediran said that no fewer than 4,000

    farmers have benefited from the institute’s training programmes during the review.

    “During the year under review, some achievements apart from areas of research have been recorded in areas of infrastructure and human resources developments.

    “Over 4,000 farmers, intending farmers, non-governmental organisation, women and unemployed youths benefited from training programmes conducted by the institute. The objective was to carry out training that will lead to poverty reduction, job and wealth creation. The farmers in turn were mandated and empowered to train other  farmers in their various  locations.

    In staff development, Adediran said: “This year, four scientists and technical staff attended both international and local conferences where they presented their research findings.”

  • Ogun says no price variation in road contract

    Ogun says no price variation in road contract

    The Ogun State Commissioner for Works and Infrastructure, Mr. Olamilekan Adegbite, has said that there is no price hike in the on-going road projects in the state. Majority of the contracts were awarded by the Governor Ibikunle Amosun’s government in 2013.

    According to a statement  signed by the Ministry’s Press Officer, Mr. Ayokunle Ewuoso, despite the astronomical increase of construction materials, the government has been able to ensure prices were not increased.

    Adegbite, in the statement, explained that it took the intervention of Amosun to convince the various contractors on why there can be no price variation on the road projects. It also said the economic recession has slowed down the pace of work on these projects.

    “The record is there for everybody to see. The governor as an accountant and a financial engineer was able to bring his experience to bear, as he was able to convince the contractors why price variation on all of these projects was not possible,” the statement read.

    On compensation for owners of buildings that will be demolished for the project, the commissioner pointed out that the consultant hired by the government had done due diligence on the affected buildings and had advised government how much should be paid as compensation to owners.

    The compensation are in three folds. The first is the compensation which would be paid to owners of the buildings and the second  would be for those who have buried dead bodies in their compounds which they have to exhume and relocate for reburial in another location. The third fold is termed “Merciful Grants’’ meant for those who do not have money to pack their belongings to a new place.

    He noted that government has mobilised all the contractors back to sites assuring that those who were yet to go back due to some factors would by the end of April be back.