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Morocco’s Gas Stations Experience Slight Fuel Price reductions

by Radarr Africa
written by Radarr Africa

 Morocco’s filling stations experienced slight fuel price reductions on Thursday amid the ongoing inflation and energy crisis.

The National Federation of Owners, Traders, and Managers of service stations in Morocco (FNPCGS) announced that the price of gasoline should witness a new drop of MAD 1.60 to reach MAD 14.50 per liter.

Gasoline, meanwhile witnessed a slight decrease of MAD 0.22, starting today per liter. The prices, however, will differ depending on distributors across the North African country.

The drop came amid ongoing complaints regarding the energy crisis and the skyrocketing fuel prices across the country. Fuel prices were ranging between MAD 14 and MAD 16 compared to initial prices ahead of the Ukraine-Russia conflict.

Morocco’s government has been justifying the increases by mentioning the global context but vowed to take measures to combat rising fuel prices.

ALSO READ: Morocco to Supply European union with Critical Raw Material to accelerate Energy Transition

In response to inflations, Moroccans launched several campaigns, demanding decreases in food and energy prices.
Some online campaigns also called for the resignation of Head of Government Aziz Akhannouch.

Fuel price increases came amid recommendations from the competition council (a Moroccan market watchdog) which recently acknowledged the lack of political will to implement market reforms, stressing that this could be the reason for the skyrocketing gas prices.

SOURCE: Morocco news

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EconomyEnergyOil & Gas

Caps on wholesale fuel prices to make a comeback

by Radarr Africa
written by Radarr Africa

Caps on wholesale prices of fuel will be reintroduced following an end to the subsidy on pump prices, in a move meant to shield independent dealers who have for months been forced to negotiate the prices of bulk supplies with the big players.

The Energy and Petroleum Regulatory Authority (Epra) stopped setting caps on wholesale prices of fuel in May last year following the introduction of subsidy on super, diesel and kerosene.

The move has in recent months been protested by small dealers, who have argued that it has amounted to their being locked out of business due to lack of margins when they source fuel from large retailers, who are their direct competitors.

Withdrawal of the caps on wholesale retail prices came amid cash-flow woes facing oil dealers due to delayed compensation from the State, and lower exchange rates of the dollar used to compensate them compared to rates of buying the greenback from banks.

“We will reintroduce the caps on wholesale retail prices now that we are removing the subsidy that had made it difficult to set the caps,” Epra Director General Daniel Kiptoo told the Business Daily.

The government discontinued subsidy on super petrol in the monthly cycle ending tonight. Subsidies on diesel and kerosene are also expected to be scrapped in the pricing cycle that starts midnight and lapses on November 14.

ALSO READ: Kenyan Furniture Firm Moko Raises Sh786.6 Million To grow it’s Business Line

Wholesale prices have traditionally been up to Sh8 less per litre lower than the retail prices of super and diesel, allowing small players to enjoy margins on sales and remain competitive.

Small independent dealers have since last year been left to negotiate wholesale prices with oil majors amid concerns that some have been getting supplies at the set retail prices leaving them with no room to make returns and forcing them to close operations.

Lack of caps on wholesale prices of fuel locked small dealers out of supplies by the oil majors while others in remote parts of the country opted to breach the caps on retail prices, risking fines and closure by the regulator.

The energy regulator sets ceilings on the wholesale retail prices of fuel in a bid to give small independent dealers a leeway to sell the same at the gazetted pump prices and make returns, allowing them to remain afloat. It also allows some small dealers to offer discounts at the pump, which is key to attracting motorists who would otherwise opt for more established outlets.

Drying up of the wholesale market further cut the market shares of independent dealers, especially in urban areas with some oil majors such as French-owned Rubis disclosing that it significantly ramped up fuel sales due to the hitches facing small dealers who are mostly owned by locals. The small marketers combined control about half of the fuel customer base in Kenya.

Vivo Energy Kenya controls 26.52 percent of the local petroleum sales market as at March— the first time that a single oil marketer controls more than a quarter of the market— according to data from industry lobby, the Petroleum Institute of East Africa.

SOURCE: Business daily

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EconomyEnergyKenya NewsOil & Gas

Inflation of electricity and fuel prices in Kenya hit the consumers

by Radarr Africa
written by Radarr Africa

The energy regulator has made a U-turn and increased electricity prices by 15.7 percent, reversing the January cuts by the former President Uhuru Kenyatta administration, in what has handed consumers a twin blow in the wake of higher fuel prices.

The Energy and Petroleum Regulatory Authority (Epra) also quietly hiked pass-through costs last week, including fuel, forex and inflation adjustments, pushing the cost of a kilowatt hour unit to Sh25.3 for domestic consumers who use more than 100 units a month.

This means that with Sh1,000, consumers on the over 100kWh tariff would now get 39.5 units of power, down from the 45.7 before the review.

The heavier consumers and industries will see their power costs rise even higher since the pass-through costs now account for more than a third of power bills.

Bills sampled by business daily show Epra increased fuel cost charge (FCC) to a historic high of Sh6.7 from Sh4.6 last month, translating to a 43 percent jump, setting consumers up for the highest cost of power since December last year.

The FCC is the single-biggest variable cost that is adjusted monthly and is collected by Kenya Power on behalf of the expensive thermal power generators.

The regulator has also almost doubled the forex charge from Sh0.7 to Sh1.3 — a high last seen in January 2021, reflecting the impact of the shilling decline on power bills — and adjusted the pricing to higher inflation of Sh0.67. A rise in the fuel and currency surcharge increases the cost of power by reducing the number of units consumers get for a similar amount of money.

The record-high fuel surcharge comes at a time when the government and the International Monetary Fund (IMF) have agreed to end the fuel subsidies that have been cushioning consumers.

President William Ruto indicated on Tuesday he will imminently drop the fuel subsidy, setting up Kenyans for higher transportation and production costs.

ALSO READ: Safaricom partners with NCPWD to connect people with disabilities with job opportunities

Dr Ruto said in his inauguration speech that the economy cannot sustain consumption subsidies in the coming months, pointing to a policy shift that may see him leave the prices of food and fuel to be determined by the market forces of supply and demand.

Last night, energy officials were holed up in a meeting to make a decision on the latest price review, which was the first under the Ruto administration.

Fuel price review

Epra delayed the announcement of the new fuel prices past 9 pm as the new administration faced a  tough decision that eventually pushed pump prices by at least Sh20 more per litre.

The regulator traditionally issues the notice on new prices before 7 pm and last night’s delays highlighted the weight of the key decision that directly hampers the pre-election pledge that President Ruto made to Kenyans in a bid to lower the cost of living.

A litre of super petrol shot up by Sh20.18 after Wednesday’s review, which saw the new administration scrap subsidies on petrol. It will now retail at Sh179.3 in Nairobi, Sh176.9 in Mombasa and Sh179.5 in Kisumu. 

Dr Ruto retained partial subsidies on diesel and kerosene in an attempt to protect the poor and industries. This will see the price of a litre of diesel go up by Sh25, after a government subsidy of Sh20. Kerosene has shot up by Sh20, after a subsidy of Sh26.25.

A litre of diesel is now retailing at Sh165.82 in Nairobi, while kerosene jumped to Sh147.84 on the gradual removal of the fuel stabilisation scheme that sets the stage for a spike in the cost of living.

Electricity tariffs

An increase in energy prices pushes up the cost of production, translating to more expensive consumer goods. Households will require more money to pay for the same number of electricity units during the month.

The energy regulator did not disclose what prompted the increase in the surcharge, but it comes on the back of costly crude oil due to demand growth in the global market.

The law provides that electricity tariffs be reviewed every three years, but the timetable has been erratic as the regulator has often delayed or amended the rates, partly due to the government seeking to ease inflationary pressure on households and industries.

The tariff factors in consumption, fluctuation in global fuel prices and hard currencies against the Kenyan shilling as well as regulatory, hydropower, rural electrification levies and taxes.

Electricity tariffs were reviewed in January to effect a 15 percent reduction by the Kenyatta administration to ease the cost of living.

The State had targeted slashing electricity bills 33 percent by December 2021 but dropped the plan and opted to reduce the costs in two tranches of 15 percent following opposition from independent power producers (IPPs) who supply electricity to Kenya Power.

The IPPs argued that Kenya has no unilateral right to alter the contracted capacity and payments, saying instead that the State has to protect PPAs — some of who have 20-year protected contracts.

The government shelved the second tranche of the electricity cuts after the IMF protested, citing a potential collapse of Kenya Power which is currently struggling with cash flow problems.

The Fund said the tariff reduction aggravated Kenya Power’s pre-existing liquidity challenges by lowering revenues by an estimated Sh26.3 billion per annum.

The additional cost-saving measures currently identified across the electricity supply and distribution chain would only yield benefits over time and are not sufficient to fully offset this revenue impact.

The multilateral lender has gained influence over Kenyan policy since it gave the country Sh270.2 billion ($2.34 billion) in loans in exchange for a reform package that includes eliminating fuel and tax subsidies to improve revenue collection.

High costs

The IMF has also introduced a new condition under its the 38-month programme requiring the government to scrap the subsidy that has kept petrol prices by October.

Kenya has since April last year spent an average of Sh9 billion to subsidise diesel, super petrol and kerosene— costs which rose to an average of Sh12 billion in the last four months alone— highlighting the adverse impact of the intervention on the country’s revenue.

Higher electricity prices coupled with a jump in fuel is set to cascade price hikes throughout the economy on increased costs of production, including transport and inputs.

Consumers are already burdened with the sharpest rise in the cost of living in more than five years in August, amid a failed maize flour subsidy, rising fuel costs and a weakening shilling.

Inflation, a measure of the cost of living, climbed to a 62-month high of 8.5 percent from 8.3 percent the prior month.

The shilling is currently at an all-time high of 120.4 against the dollar, raising the cost of imports of a wide variety of goods, including petroleum products, wheat, second-hand clothes, motor vehicles, vegetable oils and industrial machinery.

Kenyans on social media have recently raised concerns over reduced cash flow, fewer employment opportunities and mounting public debt, which triggered a petition to the IMF to stop giving the country more loans.

SOURCE: Business daily

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AfricaBusinessNigeriaWestern Africa

NNPC approves N179 per litre pump price

by Radarr Africa
written by Radarr Africa

The Nigerian National Petroleum Company (NNPC) Limited has approved a new pump price after weeks of promises that it will retain N165.

NNPC, in a notice to fuel marketers, directed them to change the petrol price on pumps to N179 per litre from N165 per litre effective today (Tuesday).

This was even as the company equally increased the ex-depot price from N148.17 to N167 per litre.

ALSO READ: Naira falls to N630/$1 at the black market

The new pump price is coming after weeks of petrol scarcity resurfaced across the country as fuel retailers were adopting different price bands to force unofficial deregulation attempts.

Already, the majority of filling stations in Lagos Nigeria have adopted different price models.

While some filling stations have changed the price on their meters to reflect the current price they are selling at, others have left theirs to show the approved retail price of N165 per litre, but were selling above the displayed price.

Source: Ripples Nigeria

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Business and EconomyNigeriaWestern Africa

Fuel hits N250/litre in Abuja, others, queues spread

by Radarr Africa
written by Radarr Africa

Fuel is now being sold between N200/litre to N250/litre with queues emerging in different states, according to a report by Punch on Sunday. This is higher than the government-approved retail price of N165/litre.

The report stated that some filling stations in Lagos, Abuja, Niger and other states in Nigeria dispensed Premium Motor Spirit at between the amount stated above

It was gathered that the worsening queues for petrol in Lagos and neighbouring states, as well as its prolonged persistence in Abuja and environs, were due to the insufficient supply of products by the Nigerian National Petroleum Company.

NNPC is the sole importer of petrol into Nigeria for several years running. It often claims to have enough products to keep the country wet for months. It, however, stayed mute on Sunday when contacted.

In a report by Punch, some filling stations in Lagos sold petrol to motorists at N200/litre and still had queues, as black marketers dispensed the product at N300/litre.

In Abuja, Khalif filling station in Kubwa, dispensed the commodity at N250/litre on Sunday but had N165/litre displayed on its pumps. But once a motorist tells the fuel attendant the amount he or she wishes to buy, this would be calculated based on N250/litre.

The queues for petrol in Abuja has never ceased since February this year, but it grew worse in neighbouring states of Nasarawa and Niger on Sunday as motorists search for PMS to move around during the Sallah break.

Oil marketers denied claims of product hoarding or diversion, as they stressed that the insufficient supply of PMS by NNPC and the non-payment of bridging claims for the transportation of petrol were the key reasons for the scarcity.

The President, Petroleum Products Retail Outlets owners Association of Nigeria, Billy Gillis-Harry, told Punch correspondent that filling stations that had products were dispensing, while those that were shut had no petrol to sell.

He said, “The problem is that every side needs to be transparent. We as retail outlet owners are ready to sell petroleum products to the teeming Nigerian public. We have no reason why we should not sell our products.

“The money used in buying the 45,000 litres of petrol from depots, almost N7m, is borrowed, and time-bound. So every retail outlet owner knows that the wise thing to do in this business is to sell out and try to turn around that sale as many times as possible.

“So with this scenario in view, there is no retail outlet owner that is hoarding product or diverting it. Yes, we know there may be bad eggs among the good bunch, but the fact that we are not having sufficient products is what has remained the cause of fuel scarcity.”

Gillis- Harry added, “In the case of Abuja, it is clear to understand that if the bridging claims are paid to marketers, they will be able to continue their products’ purchase cycle. That is just the reality. So payment of bridging claims is an issue and insufficient supply is also another issue.

“This is because if there is product and there is money for us to buy, then why won’t we buy and sell? What else are we in business for? Are we going to buy products and keep them? The answer is no! So this is the reality.”

On what could be the solution to the current crisis in the downstream oil sector, the PETROAN president stated that everything still boiled down to the need to end the current fuel subsidy regime.

He said, “There is a solution and it is simple. The subsidy that is being paid should be stopped. The money should be channeled to other developmental infrastructures such as health, education, etc.

“And since the refineries have not been fixed by the government, they should either give it wholly to private sector practitioners like PETROAN that own the retail outlets to manage.”

The NNPC stayed mum when asked to react to claims of insufficient supply of petrol by the national oil company. Its spokesperson, Garba-Deen Mohammad, did not answer calls and had yet to respond to a text message sent to him on the matter.

Fuel price hits N200/litre in Lagos, scarcity persists

Further checks show that some filling stations in Lagos and Ogun states sold fuel at N200/litre.

While many stations were under locks and keys despite a promise by the NNPC to keep the country wet, many among the few that had products were seen dispensing above N200/litre

According to findings, the Federal Government and oil marketers are yet to come to a compromise on how much a litre of petrol should be sold, and marketers are beginning to sell products at prices not approved by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The continuous rise in prices comes on the heels of recent threat to withdraw the licenses of marketers that sell above official price of N165/litre issued by Chief Executive, NMDPRA, Farouk Ahmed.

He advised the government to issue a statement on the marginal increase in the pump price of petrol.

Executive Secretary of the Major Oil Marketers of Nigeria, MOMAN, Clement Isong, declined to comment on the causes of the rising petrol prices.

Among other things, marketers are lamenting high operational costs due to rising diesel price which is currently being sold above N800/litre at depots. There are fears that diesel prices could hit N1500/litre if nothing is done to tame prices.

ALSO READ: MAN Demands Licence to Import Diesel from Niger Republic, Chad

The National Operations Controller of Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, however, debunked allegations that NMDPRA and marketers secretly agreed to increase the price.

“That’s not true. There is no letter to that effect from NMDPRA,” he said.

However, when asked why the fuel price was rising, he said it was due to the hike in the price of diesel.

“Those stations you see that sell above N165 do so because they have to recover their costs,” he said.

On when the Federal Government would pay marketers the promised bridging claims, he said the payment process could stretch till July ending.

“Marketers are just submitting their claims and they will be verified first. So payment could be by the end of July” he said

Reacting to the continuous price face-off between the Federal Government and marketers, industry analyst and former Group Chairman/CEO, International Energy Services Limited, Dr. Diran Fawibe, said the issue of fuel supply appeared to have defied solutions.

“Everybody is throwing figures about costs and prices to sell and what not to sell. At the end of the day, it’s the consumers that will bear the brunt. What we have noticed is that prices vary from station to station, and from state to state, and obviously, that’s what the bridging payment by the Federal Government was supposed to address”, he said.

On his part, Chief Executive Officer, Centre for the Promotion of Private Enterprise and former Director-General, Lagos Chamber of Commerce and Industry, said the current price was not sustainable.

According to him, the government is not in any way in the best position to control the prices of petrol if it cannot control diesel prices.

Commuters groan as transport fares rise

According to residents from Alagbole-Akute axis of Ogun State, transport fares have increased by 50 cent – 100 per cent with bikes and buses becoming scarce. The residents blamed the situation on the fuel scarcity that has begun to manifest as long fuel queues and the reduction in the number of bikes plying the area as a result of the Sallah break.

One resident, who identified himself as Tayo Okediji, said, “Alagbole to Berger was between N200 and N300 today. There are more commuters on the roads because most of the bike operators are observing the Sallah break, and the few available ones have hiked the price. According to them, there is no fuel.”

Source: Punch

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