Global oil prices took a dramatic turn on Wednesday, jumping by five per cent, after dropping to $88 per barrel on Tuesday, according to market data.
Brent hits $92.43 per barrel as of 10: 56 AM WAT, signalling a 5.27 per cent increase. It had initially hit over $100 per barrel on Monday as crisis in the Middle East continued unabated.
The main US contract, West Texas Intermediate, soared 5.9 per cent to $88.38 per barrel.
The development followed a cut in the price of Premium Motor Spirit (PMS) or petrol by the Dangote Petroleum Refinery on Tuesday.
Dangote Group’s Chief Communications Officer, Anthony Chiejina, told Channels Television on the phone Tuesday that petrol at the gantry will now be sold at ₦1,075 per litre from ₦1,175 per litre last week, representing a ₦100 drop.
READ ALSO: Dangote Refinery Reduces Petrol Price By ₦100 To ₦1,075 Per Litre
Petrol supplied through coastal distribution will now sell at ₦1,050 per litre.
The Refinery also explained that the move reflects global oil prices.
“As responsible corporate citizens operating in a high-governance code and ethical environment, we believe it is imperative to reduce the price of our products as a reflection of the decline in global crude oil prices,” it explained in the statement on Tuesday.
“All our crudes are priced on the global benchmark price plus a $3 to $6 additional premium. Our forex is paid at the prevailing market rate of the day, with no subsidy in both crude and forex.
“For the avoidance of doubt, the crude supplied under the Naira-for-Crude arrangement is priced according to the global benchmark price plus a premium which is then converted to naira using the prevailing market exchange rate.”
READ ALSO: Fuel Price Hike: Tinubu Orders Deployment Of 100,000 CNG Conversion Kits Nationwide
The refinery reiterated its commitment to strengthening national energy security in line with the economic realities faced by Nigerians.
The development marked the first price cut after three successive hikes that had pushed the cost of the commodity significantly higher in recent weeks.
On March 9, the chief executive officer (CEO) of the refinery, David Bird, said the Dangote refinery was not immune to global oil shocks as it secures its crude on international benchmarks.
The Dangote Refinery’s reduction in the cost of the essential commodity comes as crude oil prices dropped to $90 a barrel on Tuesday, the first decline since the war in the Middle East began.
The war involving the United States (US), Iran, and Israel raised global oil prices, leading to a hike in petrol prices in Nigeria.
As the crisis in the crude-rich Middle East continued into a second week, with seemingly little sign of a conclusion on the horizon, US President Donald Trump said that the campaign was far ahead of his initial timeline of around a month.
“I think the war is very complete, pretty much. They have no navy, no communications, and they’ve got no air force,” Trump told CBS News by phone.
“If you look, they have nothing left. There’s nothing left in a military sense,” he added.
Trump told the US broadcaster that the United States was “very far” ahead of his initially stated wartime frame of four or five weeks.
He later told a news conference in Florida that “it’s going to be ended soon, and if it starts up again, they’ll be hit even harder”.
When asked if he thought the war could end in days or weeks, he replied, “I think soon. Very soon.”
Tinubu Orders Deployment Of 100,000 CNG Conversion Kits
In a bid to address the impact of the war in the Middle East on the cost of transportation in Nigeria, President Bola Tinubu on Tuesday directed the immediate deployment of about 100,000 Compressed Natural Gas (CNG) conversion kits across the country.
The Executive Chairman of the Presidential Initiative on Compressed Natural Gas (Pi-CNG), Ismaeel Ahmed, disclosed this after meeting with the president at the State House, Abuja.
Ahmed said the president is keenly monitoring global developments and their impact on Nigeria’s energy costs, particularly the effect of the Middle East conflict on fuel prices and transportation.
According to him, Tinubu has mandated the Pi-CNG initiative to accelerate the rollout of CNG infrastructure and alternative mobility solutions nationwide.
READ ALSO: Fuel Price Hike: Tinubu Orders Deployment Of 100,000 CNG Conversion Kits Nationwide
Ahmed said the kits would enable vehicle owners and tricycle operators to convert their engines from petrol to CNG.
He added that the deployment would begin within the next two to three weeks.
