An economist and the Chief Executive Officer of Financial Derivatives Company Limited, Mr. Bismarck Rewane, has projected that petrol prices in Nigeria could reach N1,200 per litre in the near future.

In his November 2024 economic outlook, Rewane also predicted that Brent crude could trade at $70 per barrel by December and that inflation might rise to 34%. He forecasted a potential appreciation of the Naira to N1,550/$ by January 2025.

According to ThisDay, Rewane shared these insights during the November edition of the Lagos Business School’s Breakfast Session titled ‘Democracy on Trial! Trump – Going Back to the Future.’

He highlighted that there is no economic rationale for the Naira to trade at less than 30% of its fair value within the next 12 months.

“According to the Economist Intelligence Unit, crude oil prices next year will average $74 per barrel, which could push petrol prices to N1,200 per litre,” he stated.

He added that global oil prices and logistics distribution costs will play a significant role in determining petrol prices, noting that higher petrol prices could help curb smuggling while official fuel exports to neighboring countries might boost foreign exchange revenue.

Rewane cautioned that while the Dangote Refinery has been viewed as a game-changer for Nigeria’s oil sector, it is not the ‘silver bullet’ many had hoped for.

“The refinery’s pricing strategy is dictated by global crude prices and operational costs,” he explained.

While it would ensure supply and availability, it would not necessarily stabilize prices, as the refinery operates on a cost-plus margin model.

“Smuggling will continue as long as Nigeria’s petrol prices remain lower than those of neighboring countries,” he noted.

Rewane also pointed out that the recent increase in petrol prices from N600 to N1,030 per litre has led to a 25% reduction in vehicular movement. This observation was based on a vehicular count report conducted on Adeola Odeku, a major thoroughfare in Victoria Island, Lagos.

He emphasized that the Naira is currently undervalued by 35.18%, with its fair value pegged at N1,090.24 to the Dollar, compared to the current NAFEM rate of N1,682 and the parallel market rate of N1,742 per Dollar.

“We anticipate that the Naira will strengthen by January 2025, contingent on reforms in the exchange rate determination mechanism,” Rewane said.

He stressed that “there is no justification for the Naira to trade at less than 30% of its fair value for an extended period. We expect the currency to regain some of its value by early next year.”

Rewane underscored that the exchange rate is a significant driver of inflation in Nigeria. A partial recovery of the Naira would help reduce inflation and curb excessive money supply in the economy.

He projected that the Monetary Policy Committee (MPC) might maintain its current stance to allow existing policies to take effect, but upcoming inflation data for October, set for release on November 15, could influence this decision.

Rewane further noted that fluctuations in crude oil production could impact Nigeria’s trade balance and exchange rate.

Historically, stable exchange rates align with periods of positive trade balances and high crude oil production, while trade deficits and currency depreciation are linked to low production or declining oil prices.

He concluded that Nigeria’s best-case scenario would involve the Central Bank of Nigeria (CBN) keeping interest rates high until 2025, a surge in capital flows, regular rDAS auctions, and an increase in oil production to 1.55 million barrels per day.

Rewane also highlighted that corporate entities are facing significant foreign exchange losses, which have collectively reached N2 trillion for 10 prominent companies, impacting their earnings.

He pointed out that fixed assets acquired at historic rates have now fully depreciated, increasing operational inefficiencies and driving up maintenance and replacement costs.

“Companies with foreign currency-denominated debt are also experiencing increased servicing costs,” he concluded.

The Governor of Bayelsa State, Douye Diri, has lamented that his state has been without power for the last three months, a situation attributed to the destruction of the power infrastructure of the Transmission Company of Nigeria (TCN) by vandals.

Diri made this announcement during the 2024 All Nigerian Editors Conference, which took place at the DSP Alamieyeseigha Memorial Banquet Hall in Yenagoa, the capital of the State, on Friday.

He pointed out that since the vandalism occurred, the state has been plunged into darkness for the duration of the three months.

He revealed that his government has been in close collaboration with TCN to bring back electricity to the state, and mentioned that as part of his ASSURED Agenda, there are plans to establish the state’s own power generation through gas turbines.

“I just want to let you know maybe you are in hotels where you have power. Bayelsa has been without power for the past three months. The hotels have light, so you may not know that the people of this state have been living without power for the past three months.

“The reason was that electrical installations of the Transmission Company of Nigeria were vandalized by criminals. After that vandalization, the state has remained in darkness till today. The other one that happened in the North was also a similar thing to this one, but we heard power has been restored in the North.

“But in our state here, for three months and still counting, there is no electricity and we are working hand in gloves with the Transmission Company of Nigeria. As you are all aware, energy was is under the exclusive list, particularly transmission. It is only with the coming of Mr. President that he liberalized it and signed into the law that now allows state governments to generate and distribute energy.

“For us as a state, we are very rich in gas, even more than oil. Now we are working with the TCN to restore the National Grid but we will not stop it there. We have now moved beyond that to see how we can have our own independent power supply through the gas turbines,” the governor told the editors.

The Academic Staff Union of Universities (ASUU), the Senior Staff Association of Nigerian Universities (SSANU), among other academic unions, will meet the federal government’s reconstituted committee next week on the renegotiation of the 2009 agreement with university-based unions.

Naija News reports that ASUU’s National President, Emmanuel Osodeke, made this known in an interview with Punch in Abuja.

However, Osodeke did not specify the meeting date but stated that the committee would meet in the coming week to deliberate on issues.

In early October, the Federal Government announced the reconstitution of a committee to renegotiate the 2009 agreements between the government and various university-based unions.

The committee received a time frame of three months.

Recall that the Minister of State for Labour and Employment, Hon. Nkeiruka Onyejeocha, has affirmed that the Federal Government is taking proactive measures to prevent another strike by the Academic Staff Union of Universities (ASUU).

She noted that President Bola Ahmed Tinubu‘s administration is working diligently to address the underlying issues and implement reforms that will strengthen Nigeria’s economy in the long term, despite the immediate challenges these reforms may present.

Speaking during her 17th annual free medical outreach in Isuochi, Abia State, Onyejeocha reassured the public that the concerns raised by ASUU would soon be resolved.

ASUU recently issued a 14-day ultimatum to the government, demanding the settlement of four months’ salary arrears from the 2020 strike, the migration of its members from the Integrated Personnel and Payroll System (IPPS) to the University Transparency and Accountability System (UTAS), and the payment of outstanding earned allowances, among other issues.

Onyejeocha expressed optimism that ongoing discussions with ASUU would lead to a positive resolution soon