THISDAYonline

Crude oil prices continued on the upward swing wednesday, closing at around $33 per barrel in the international markets. This is about $2 more than the old price.

But oil traders engaged in importing fuel into Nigeria said wednesday the rising crude oil prices have also shot up the cost of petrol, throwing the import schedules of marketers into another round of turmoil.

The US light crude was traded at $33.85 per barrel while the market benchmark crude, the British Brent, closed at $32.54 per barrel.

The prices represent 43.5 percent above the $23 per barrel rate the Federal Government based revenue projections for the 2004 budget.

Government hopes to earn N2,160 billion this year, with oil revenue contributing N1,445 billion from crude oil production of 2.24 million barrels a day (bpd), including 150, 000 barrels of condensate.

Analysts said oil prices had been boosted by the biting winter across Europe as well as expectations of a draw in US crude stocks ranging between 500,000 barrels and 3 million barrels.

The Organisation of Petroleum Exporting Countries (OPEC)'s own crude basket stood at $32.33 per barrel as at Tuesday. This is $2.33/dollar per barrel above the upper limit of the group's $22-28/bbl target band.

The basket has now been above the band for 22 consecutive trading days, a development that should in theory have seen OPEC prepared to raise production by 500,000 bpd in order to push prices back into the band.

But the organisation said it would not make any adjustments to its crude output ceiling before its next meeting on February 10, in Algiers, despite high world oil prices.

OPEC rules provide for an output increase or cut if the basket stays above the band for 20 consecutive trading days or falls below it for ten days.

"OPEC will neither raise nor lower its production before the Algeria meeting on February 10," said its president, Purnomo Yusgiantoro.

OPEC believed there was no need to adjust output because current prices did not reflect fundamentals of supply and demand. Despite the high prices that have prevailed this winter, OPEC ministers have consistently expressed fears that the combination of expected lower demand and rising production from OPEC member Iraq and non-OPEC producers could lead to a price fall in the second quarter of this year.

Oil traders however, said the current high crude oil prices have pushed the cost of imported fuel equally higher. They argued that for instance the January deliveries of a cargo of gasoline was $314 per metric ton compared to just over $280 per metric ton last month.

One of the traders engaged by major oil marketing companies to import petrol on their behalf, told THISDAY Wednesday that already cargoes expected to arrive the country between now and next week, would come at a huge loss to the firm.

"There is a cargo carrying 28,000 metric tonnes (or 37.5 million litres) of petrol for major marketers expected to arrive next week. The higher landing cost compared to the prevailing cost when the contract was made, is something we are hoping to open negotiation when the cargo arrive," said a source.

The first major import by marketers after the government flagged off the full deregulation of the downstream oil sector last October, arrived the country at N33 per litre landed cost. Pump price of petrol then was at between N39 and N41 per litre.

Marketers have been pushing for a review in the ceiling of the pump price for petrol to between N45 and N50 per litre. This followed the introduction of the N1.50 per litre fuel tax, high cost of sourcing foreign exchange and the high oil prices in the international market.

The request has however, not received favourable response from the Petroleum Products Pricing Regulatory Agency (PPPRA).

A slip in the delivery of fuel cargoes ordered by marketers resulted in the one-week fuel shortages that hit Lagos and its environs during last Christmas celebrations.