The price of Brent crude, the international benchmark, tumbled on Wednesday to the lowest level in 17 years as global markets continued to respond to the price war between Saudi Arabia and Russia amid the spread of the coronavirus pandemic.
Brent, against which Nigeria’s crude is priced, fell by $3.84 to $24.89 per barrel as of 7.05 pm Nigerian time on Wednesday, its lowest level since late 2002.
With the oil price now more than 50 per cent lower than Nigeria’s budget benchmark, the country’s oil-dependent economy has come under more pressure.
The 2020 budget, which was signed by the President, Major General Muhammadu Buhari (retd.), in December, was based on oil production of 2.18 million barrels per day with an oil price benchmark of $57 per barrel.
The Federal Government was looking to generate N2.64tn oil revenue, representing 32.34 per cent of expected total revenue for this year, with non-oil revenue projection being N1.80tn.
The price war between Saudi Arabia, the de facto leader of the Organisation of Petroleum Exporting Countries, and Russia after the collapse of talks on coordinated output cuts is increasing pressure on the market, according to Reuters.
Travel and social lockdowns aimed at countering the coronavirus were said to have raised prospect of the steepest ever annual fall in oil demand.
Investment banks and consultancies have been making heavy cuts to their demand forecasts as a growing number of the world’s largest cities and economies restrict movement.
“The oil demand collapse from the spreading coronavirus looks increasingly sharp,” Goldman Sachs said in a note, forecasting a fall in Brent prices to as low as $20 in the second quarter, a level not seen since early 2002.
The bank expects a demand contraction of eight million barrels per day by late March and an annual decline in 2020 of 1.1 million bpd, which it said would be the biggest on record.
Rystad Energy has gone even further, projecting a year-on-year decline in demand of 2.8 million bpd, or 2.8 per cent, this year.
“To put the number into context, last week we projected a decrease of just 600,000 barrels,” Rystad said.
In addition to imposing social restrictions not seen since World War Two, the world’s richest nations prepared to unleash trillions of dollars of spending to reduce the fallout from the coronavirus.
The impact on demand is starting to show in official statistics, with Japan’s trade bureau saying on Wednesday that crude imports into the world’s third-biggest economy in February were down nine per cent from a year earlier.
Virgin Australia became the latest airline to shut its international network with the suspension of all overseas flights, while the Australian Prime Minister, Scott Morrison, warned that the situation could last six months or more.
Elsewhere, Iraq’s oil minister pleaded for an emergency meeting between members of OPEC and non-OPEC producers to discuss immediate action to support the market.
Saudi Arabia’s energy ministry, however, said it had directed its national oil company, Saudi Aramco, to continue to supply crude oil at a record high 12.3 million bpd over the coming months.
Iraq’s Oil Minister, Thamer al-Ghadhban, asked OPEC to help to instigate urgent extraordinary meetings of the broader OPEC+ group, which includes Russia, to “discuss all possible ways” to rebalance the market.
FG Further Reduces Petrol Pump Price to N123.5 Per Litre
The Federal Government on Tuesday night reduced the price of petrol from N125/litre to N123.5/litre.
Announcing the reduction, the Executive Secretary of the PMS pricing regulator, Abdulkadir Saidu, said, “PPPRA, in line with the government approval for a monthly review of Premium.
“Motor Spirit pump price hereby announces guiding PMS pump price of N123.50 per litre.
“The guiding price which becomes effective 1st April 2020, shall apply at all retail outlets nationwide for the month of April 2020. PPPRA and other relevant regulatory agencies shall continue to monitor compliance to extant regulations for a sustainable downstream petroleum sector.”
It added, “Members of the public and all oil marketing companies are to be guided accordingly.”
The spokesperson for PPPRA, Kimchi Apollo, had told our correspondent at 7.30pm that stakeholders had been meeting on the new price since Tuesday morning.
Officials from the Central Bank of Nigeria, Nigerian National Petroleum Corporation, oil marketers and labour unions, among others, who constitute the petroleum products price modulation committee attended the meeting.
On March 19, 2020, a day after the Federal Government announced the pump price of N125/litre for petrol, the PPPRA declared that there was the possibility of a new price regime for the PMS beginning from April 1, 2020.
It explained that the N125/litre price might last till the end of March, as a new cost for petrol might be introduced on April 1.
Saidu had told journalists that the PPPRA would be undertaking a review of the PMS price and would announce a new price for the product on April 1 (today) if there were changes in the parameters used in determining the N125/litre pump price.
In another development, the Transmission Company of Nigeria on Tuesday announced an improvement in power generation.
FirstBank Donates N1bn to Fight Against COVID-19, Reiterates Commitment to Safety
FirstBank has announced its donation of the sum of N1bn towards the joint effort by the Nigerian Private Sector Coalition Against COVID-19 (CACOVID) to rapidly expand the health facilities; especially Testing, Isolation, treatment and the provision of Intensive Care Unit (ICU) facilities pivotal to controlling the spread and importantly, treating individuals diagnosed with COVID- 19. This is in addition to the Bank’s drive to move one million children to e-learning, together with an early partner – Roducate – as recommended by the Ministry of Education, Lagos State
In line with the 14-day stay home directive for Lagos, Ogun and FCT Abuja in the speech by President Muhammadu Buhari, the Bank has also reiterated its preparedness to provide essential Banking services through its alternative channels to its customers and the public at large which is in line with its robust Business Continuity Plan.
Updating on the Bank’s efforts; the Bank’s CEO, Dr. Adesola Adeduntan, said “we promise to continue to look at all areas of intervention where our business infrastructure, reach, digital platforms and other natural strengths lie and can be deployed to further support all efforts for Nigerians; young and old alike.
To that end, we will continue to communicate ways in which we can do more together.
We thank our community of friends, customers and other stakeholders who have continued to send us ideas and initiatives and are gladdened at the solidarity we see as Nigerians come together to tackle this under one umbrella.
Please stay safe and let’s work together to flatten the curve”, he concluded.
Coronavirus: FirstBank Devices Measures to Protect Employees, Customers, Others
Nigeria’s leading financial inclusion services provider, First Bank of Nigeria Limited, has announced proactive measures it has taken to control the spread of the COVID – 19 (Coronavirus) pandemic.
The Bank’s Group Head, Marketing & Corporate Communications, Folake Ani-Mumuney, said “embedded in our corporate strategy is business continuity management that ensures the delivery of products, services and initiatives to our stakeholders and enabling the economy in the long-term with minimal impact.
Therefore, we have employed necessary measures to keep our employees, customers and the general public safe-guarded and sensitised on preventive steps to flatten the curve at the fastest possible rate. These include the deployment of temperature measuring tools; hand sanitisers; face masks and adopting social distancing including utilizing virtual meetings. We have also cancelled owned and partnered planned events in the interim; suspended staff travels and have put measures in place to identify and communicate to staff who are arriving from affected countries to self-quarantine following the established protocols by the World Health Organisation and the government.
In addition, we have been amplifying all necessary official information from relevant health bodies and partners such as encouraging everyone to adhere to good hygiene practices which comprise regular cleaning of all surface areas – for example, tables, door handles – with disinfectants, consistent washing of hands as well as avoiding close contact with people and staying away from crowded environment’’.
Encouraging the use of cashless transactions, Mrs. Ani-Mumuney said; “we implore all our customers to embrace cashless transactions across our self-service platforms like *894# USSD banking services, FirstMobile, WhatsApp Banking, First Online for their needs like funds transfers, various bill payments, credit and internet data recharge and much more. In need of quick loans, these self-service platforms are also designed to meet their immediate needs through our FirstAdvance service”.
For enquiries and complaints, customers are encouraged to contact the Bank’s 24 hours multi-lingual customer care centre, FirstContact, on 01-4485500 or email, firstname.lastname@example.org.
She noted that the Bank is committed to protecting the health and safety of all its staff, customers and host communities as together the fight against Coronavirus would be won.
The National Centre for Disease Control (NCDC) should be reached on its Toll-Free Number: 0800 9700 001 for immediate medical attention and advise.