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DPR suspends sale of fuel to marketers selling above N87

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The Department of Petroleum Resources (DPR) has suspended direct sales of petroleum products to marketers selling above recommended ex-depot price of N77.66 and N34.51 for premium motor spirit (PMS) otherwise called petrol and houseHold kerosene respectively.

The suspension was contained in a statement made available to NewsDay on Thursday in Lagos State.

“Resulting from a meeting held on Wednesday, 29th July, 2015 in Lagos between the Department of Petroleum Resources and all stakeholders in the downstream sector of the petroleum industry including PPMC, PPPRA, MOMAN, DAPPMAN and IPMAN which was summoned to convey government’s displeasure at the sale of petrol above the stipulated pump price and the ever lengthening of vehicular queues at the filling stations, the DPR hereby issues the following statement and directives;

“Pursuant to the Petroleum Control Act CAP. 351 Laws of the Federation of Nigeria 1990 and the Petroleum Act 1969 (as amended), preliminary investigations revealed that the prevailing hike in retail prices of petrol and kerosene across the country is as a result of the unscrupulous activities of some depot owners and major marketers who are engaged in selling petrol and kerosene to various retailers at prices higher than the official ex-depot price of N77.66 and N34.51 respectively,” the statement read.

The regulatory agency said for it to check the activities of these depot owners and major marketers in this regard and to prevent the further imposition of hardship on the general public, “the DPR is resolved to take immediate steps to directly supervise the sale of petrol and kerosene from these affected depots in order to ensure that appropriate pricing is strictly adhered to.

“This process will involve immediate suspension of direct sales of petrol and kerosene from the affected depot owners and major marketers. Immediate setting up of a special DPR task force on supervision and monitoring of product sales from the affected depots with powers to undertake the sale of products from these depots and issue directives and guidelines to the general public on the procedure for the enforcement of the supervised sales throughout the period of this exercise until normalcy returns to the sector,” it said.

Efforts to get reactions from the Executive Secretaries of Depot and Petroleum Products Marketers Association (DAPPMA) Mr. Femi Adewole and Major Oil Marketers Association of Nigeria (MOMAN), Mr. Femi Olawore, proved abortive as calls to their lines were not answered.

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BUSINESS

Nigeria attracts $31.82bn from United States, five others in 33 months

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Capital inflows from the United Kingdom, the United States, South Africa, the United Arab Emirates, the Netherlands, and Mauritius hit $31.82bn in three years, according to data from the National Bureau of Statistics.

The NBS data showed that the six countries accounted for 83.32 per cent of the total capital of $38.18bn imported into Nigeria from over 100 countries from January 2019 to September 2021.

The UK accounted for the highest foreign inflow of $17.34bn, followed by the US ($5.79bn), South Africa ($3.99bn), UAE ($1.80bn), Netherlands ($1.68bn), and Mauritius ($1.09bn).

According to the NBS, capital importation data is obtained from the Central Bank of Nigeria and includes imported physical capital, such as equipment, and financial capital importation.

It added that capital importation comprises three main investment categories, namely foreign direct investment, foreign portfolio investment, and other investments.

It said FDI includes equity and other capital, while FPI includes equity, bonds, and money market instruments; ‘other investments’ include trade credits, loans, currency deposits, and other claims.

In 2019, Capital inflow from the six countries declined from $20.09bn in 2019 to $7.94bn in 2020. It stood at $3.78bn in the nine months to September 2021.

The Managing Director, Cowry Asset Management, Johnson Chukwu, attributed the drop in capital importation to the fall in FPI.

According to him, portfolio investors are probably discouraged to invest in the Nigerian market due to foreign exchange illiquidity.

He said, “The decline in capital importation has been consistent for the past three years, if you look at the data.

“In terms of portfolio investment, which is the major component, I think the issue is that foreign portfolio investors have likely stayed away from the Nigerian market because of foreign exchange illiquidity, as some of the funds that are trapped are yet to be accessed.”

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Airbus cancels $6bn contract with Qatar Airways after paint fight

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Airbus has cancelled a $6bn contract with Qatar Airways for 50 of its new A321neo passenger jets, escalating a legal battle between the two companies over paint on the recently delivered A350s.

Qatar Airways called Airbus’s decision announced on Friday “a matter of considerable regret and frustration”.

In December, Airbus was taken to court by Qatar Airways in London, following a series of alleged problems with the Airbus A350 aircraft.

The airline complained the paint on the recently delivered Airbus A350s was cracking and peeling, exposing copper meshing used to insulate the aircraft against lightning strike.

It is seeking more than $600m in compensation after grounding the affected aircraft – 21 of its 53 A350 jets – claiming the paint issue is a safety risk.

The deal was reportedly worth $6.35bn when it was finalised in December 2017.

Qatar Airways published a video on social media on Friday of the scarred exterior of grounded A350 jets that the airline said underscored “serious and legitimate safety concerns”.

The European Union Aviation Safety Agency independently assessed the issue and found no safety concerns.

“There is no reasonable or rational basis” for Qatari regulators to have grounded the A350s operated by Qatar Airways, Airbus said in documents prepared for a London court hearing on Thursday.

It accused Qatar Airways of instigating the grounding as it was in its own financial interest to keep the aircraft on the ground in light of the coronavirus pandemic collapse in demand for air travel.

Qatar Airways rejected the claims in a statement on Friday.

“These defects are not superficial and one of the defects causes the aircraft’s lightning protection system to be exposed and damaged,” it said. “We continue to urge Airbus to undertake a satisfactory root cause analysis into the cause of the defects.”

An investigation by Reuters news agency showed at least five other airlines reported A350 paint or skin flaws since 2016, well before Qatar raised concerns in November 2020 when an attempt to repaint a jet in World Cup livery exposed some 980 defects.

Airbus has said it is looking at changing the design of anti-lightning mesh for future A350s, but insisted there is adequate backup lightning protection. It says Qatar is undermining global protocols by seeking leverage over safety.

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Wall Street caps worst week since start of coronavirus pandemic

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Stocks fell, capping the worst week since the outbreak of the pandemic roiled markets, with tech shares bearing the brunt of the selloff amid shaky company earnings and prospects for higher U.S. interest rates.

The S&P 500 closed below its 200-day moving average, a key technical level, for the first time since 2020. The tech-heavy Nasdaq 100 slid the most among major benchmarks Friday, led by a more than 20% plunge in shares of streaming giant Netflix Inc. Bitcoin tumbled in an extended selloff for cryptocurrencies, briefly falling below $38,000 to its lowest level in more than five months.

Volatility that has gripped markets this month showed little sign of letting up Friday, with the S&P 500 falling for a fourth day, extending losses in the period to 5.7% for the worst, albeit shortened, week since March 2020. Option expirations of more than $3 trillion helped add to market turbulence.

“This is the longest short week, I think, in history, right?” Jay Pelosky, founder and president of TPW Investment Management, said on Bloomberg TV. “It’s only been a four-day week and it feels like it’s been two weeks rolled into one.”

The U.S. company reporting season so far has been uneven, highlighting the risk that it may fail to enliven animal spirits in the stock market. While Netflix’s disappointing subscriber outlook sent its shares tumbling, while Peloton Interactive Inc. suggested it was poised to rebound after the darling of the stay-at-home trade was hit by a report of temporary production halts.

Markets are also bracing for rate liftoff by the Federal Reserve. Economists surveyed by Bloomberg expect policy makers to raise interest rates in March for the first time in more than three years and shrink their balance sheet soon after. Geopolitical tensions are also adding to the jitters. A report that Washington is allowing some Baltic states to send U.S.-made weapons to Ukraine stoked concerns about a standoff with Russia.

“There are plenty of risks in the global economy, including geo-political events,” wrote Ethan Harris, head of global economics at Bank of America Global Research. “However, in our view, the biggest near-term risk is right in front of us: that the Fed is seriously behind the curve and has to get serious about fighting inflation.”

Demand for havens pushed the 10-year Treasury yield down more than 10 basis points in three days to 1.76%, leaving the rate lower on the week, the first decline for the period in five weeks.

The selloff in equity markets has volatility indexes pricing more turbulence near term than in the future. The setup, known as an inverted VIX. Such an inverted curve has occurred four other times in the past year and all coincided with market bottoms.

“We’re all going to breathe an extra sigh of relief once this session finally closes and then we can put an end to this week, because it’s been painful all around,” said Adam Phillips, managing director of Portfolio Strategy at EP Wealth Advisors in Torrance, California.

Some of the main moves in markets:

Stocks

  • The S&P 500 fell 1.9% as of 4 p.m. New York time
  • The Nasdaq 100 fell 2.7%
  • The Dow Jones Industrial Average fell 1.3%
  • The MSCI World index fell 1.8%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1%
  • The euro rose 0.3% to $1.1345
  • The British pound fell 0.3% to $1.3557
  • The Japanese yen rose 0.4% to 113.68 per dollar

Bonds

  • The yield on 10-year Treasuries declined five basis points to 1.76%
  • Germany’s 10-year yield declined four basis points to -0.06%
  • Britain’s 10-year yield declined five basis points to 1.17%

Commodities

  • West Texas Intermediate crude fell 0.7% to $84.91 a barrel
  • Gold futures fell 0.7% to $1,832.70 an ounce

SOURCE: BLOOMBERG

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