Business

UK petrol prices are closing in on all-time high, warns RAC

Petrol prices could reach all-time highs before Christmas, the RAC warned, signalling “misery” for motorists still reeling from the fuel shortage crisis.

Amid signs that the number of petrol forecourts running dry was easing, the drivers’ organisation warned that anxiety about whether motorists could fill up their tanks was likely to be replaced by concern about how much it would cost.

The average price of a full tank was already about £12 higher in September than a year earlier, the RAC said, with rising oil prices putting more upward pressure on pump prices.

Both petrol and diesel had already reached levels last seen in autumn 2013 and were closing in on the all-time record set in April 2012, the RAC said. Petrol was less than 6p below the record of 142.48p a litre.

Unleaded petrol rose by 1.5p in September to 136.83p a litre, 22p more expensive than last year, while diesel rose by 2.5p to 139.25p, a rise of 21p on 2020 prices. This took the cost of filling a 55-litre tank to £75.26 for petrol and £76.59 for diesel – for each about £12 more than last year.

The RAC said the increases were not connected to the fuel shortages that had affected forecourts across the UK in recent weeks caused by a shortage of tanker drivers and panic-buying by motorists.

The organisation instead linked the prices to the cost of oil, which increased 10% in September and moved above $80 (£57) a barrel this week. The Wall Street bank Goldman Sachs has predicted further rises, to $90 (£66), by Christmas.

The RAC’s fuel spokesperson, Simon Williams, said that oil demand was outpacing supply as economies begin to pick up pace amid eased Covid restrictions, with the increase exacerbated by Opec opting not to increase oil flows significantly this week.

He said: “[The trend] looks likely to spell further misery for drivers at the pumps as we head towards Christmas … If this were to happen we could see the average price of unleaded hit a new record of around 143p per litre. Diesel would shoot up to 145p, which is only 3p off the record high of 147.93 in April 2021.”

Williams added that, despite a few isolated cases, more expensive pump prices were not due to retailers exploiting the fuel shortages to take advantage drivers.

Shortages were easing on Tuesday, as the Petrol Retailers Association (PRA) said that about 64% of fuel stations in London and south-east England, the regions worst hit by the crisis, had both petrol and diesel available; previously the figure was 62%. Just 15% were dry, an improvement on Monday’s 20%, while further 21% were offering either petrol or diesel, up from 18% a day earlier.

However, the PRA executive director, Gordon Balmer, said those regions were still lagging behind the rest of the country, despite the deployment of soldiers to drive fuel tankers so as to plug a persistent shortfall of HGV drivers that had also affected supply chains in the retail and food sectors.

The RAC said its breakdown service had attended 13 times as many cars that had run out of fuel as usual.

Williams said: “As forecourts’ fuel stocks return to normal drivers will inevitably switch from worrying about whether they can get the petrol or diesel they need, to just how much a fill-up is costing them.

“Drivers in London and the south-east will undoubtedly feel particularly hard done by as they are still experiencing problems with getting hold of fuel while also paying the highest prices in the UK.”

Business

CAC threatens to shut down PoS operators as deadline for registration expires

The Corporate Affairs Commission has said it will work with law enforcement agencies and other legal means to shut down recalcitrant Sales Operators who fail to register their businesses as its 60-day deadline lapses.

The Commission disclosed this in a notice Friday on its official X handle.

This comes after CAC on July 7, 2024, issued a 60-day deadline which expired on Thursday, September 5, 2024, for all PoS operators to register their businesses.

CAC noted that there was inadequate compliance with its directive, noting that those who decided not to register may be engaging in unwholesome activities.

“The Commission notes inadequate compliance with the directive for formalization when viewed from the background of the large number of POS operators in the country. Those who have taken steps to formalize in line with the Commission’s directive are commended for their positive attitudes.

“Recalcitrant operators have refused to adhere to the advice for formalization due possibly to engagements in unwholesome activities or for some reasons best known to them.

“We are here to make it clear that the Commission is working with Law Enforcement Agencies and other relevant stakeholders to deploy a comprehensive enforcement and sanction framework that may include not only possible shutdown but other severe legal Consequences.”

Meanwhile, the Association of Mobile Money and Bank Agents in Nigeria, AMMBAN, recently challenged the CAC’s registration directive.

Business

Dangote’s petrol to flood market from Sept 15 — NNPCL

The Nigerian National Petroleum Company Limited (NNPCL) has announced that Premium Motor Spirit (PMS), commonly known as petrol, from the Dangote Refinery will begin to flood the market starting on September 15, 2024.

This development follows the refinery’s commencement of petrol refining earlier in the week.

In a statement signed by the NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, on Thursday in Abuja, the company clarified that petrol prices would now be determined by market forces.

The statement addressed speculations about price control, reiterating that the downstream sector had been fully deregulated and that NNPCL would no longer fix fuel prices.

Adedapo Segun, NNPCL’s Executive Vice President of Downstream, emphasised that foreign exchange (forex) illiquidity had been a major factor influencing PMS price fluctuations, which are now regulated by the free market as mandated by the Petroleum Industry Act (PIA).

Segun also noted that the current fuel scarcity should ease within a few days as more filling stations recalibrate their systems and resume selling PMS.

He cited Section 205 of the PIA, which established that petroleum prices are governed by market forces rather than government intervention. The exchange rate, he added, significantly impacts fuel prices.

Regarding the supply of petrol from the Dangote Refinery, Segun stated that NNPCL was preparing for the September 15 timeline when products would be available for distribution.

He assured Nigerians that NNPCL is working closely with fuel marketers to ensure stations remain open and well-stocked to meet demand, while measures are being taken to prevent product diversions.

Segun’s comments come on the heels of the Federal Government’s announcement of an impending boost in petrol supply over the weekend, as vessels had started offloading while reaffirming that PMS prices would not be fixed by the government.

Business

PMS Prices are determined by free market forces—NNPC Ltd

The Nigerian National Petroleum Company Limited (NNPC Ltd.) has stated that foreign exchange (forex) illiquidity has been a significant factor influencing the fluctuation in prices of Premium Motor Spirit (PMS), which are governed by unrestricted free market forces, as provided for in the Petroleum Industry Act (PIA), 2021.

Speaking on TVC News’ “Journalists’ Hangout” show on Thursday, the Executive Vice President of Downstream, NNPC Ltd., Mr. Adedapo Segun explained that the current fuel scarcity was expected to “subside in a few days as more stations recalibrate and begin selling PMS.”

He said Section 205 of the PIA, which established NNPC Ltd., stipulated that petroleum prices were determined by unrestricted free market forces.

According to him, “The market has been deregulated, meaning that petrol prices are now determined by market forces rather than by the government or NNPC Ltd. Additionally, the exchange rate plays a significant role in influencing these prices.”

On the commencement of lifting PMS from the Dangote Refinery, Segun said that the NNPC Ltd. was awaiting the September 15th timeline provided by the Refinery.

Segun, who said no right-thinking individual would be comfortable with the current fuel scarcity, added that the NNPC Ltd. has nearly a thousand filling stations nationwide and was collaborating with marketers to “ensure that stations open early, close late, in order to maintain adequate fuel supply to meet the needs of Nigerians.”

He assured Nigerians: “We are also engaging relevant authorities to ensure products diversions are prevented and timely deliveries to all stations are ensured. The scarcity should ease in the next few days as more stations recalibrate and begin operations.”