Retail Prices Remained Stubbornly Static as Naira Strengthened at the New Forex Window


 Thursday, April 27, 2017/ 7:14 PM /FDC

The naira strengthened at the new forex window (investors and exporters) to close at N380/$. At the parallel market the naira also appreciated to N386/$. This concentric movement in exchange rates is beginning to reflect a more realistic value of the naira.

Retail prices have continued to remain stubbornly static except for diesel where the wholesale price has crashed by 5% to N190 per litre. In the oil markets, Bonny Light climbed marginally to $51.82pb on the news of lower than expected US output.

The attached report summarizes the commodity price movements for this week.

Burning Economic Issues 

•FAAC shared in April: N466.93bn  

•External reserves crosses $31bn - CBN Governor  

•Naira strengthens at the new window to close at N380/$  

•N388/$ at the parallel market  

•Oil price increases marginally by 0.43% to $51.82pb on lower that expected US output  

•Average power from the grid down 269MWh/h to 3720MWh/hour    

•Wholesale diesel price sharply lower at N190 per litre

Economic News  

The Good

        Parallel market rate appreciates to N388/$    

         External reserves at $31bn is naira positive    

         Lower diesel price reduces operational cost for manufacturers    

The Bad  

• Oil production falls to 1.5mbpd in March from 1.6mbpd in February  

• Retail prices still sticky      

Power Generation analysis & Impact  

April 25th: On grid power output was 3720MWh/hour (down 269MWh/h)   

• Total Power constraints: 2,163MW due to gas and line constraints   

• Estimated loss: N1,038bn (annualised at N373.68bn /$0.93bn)    

•System collapse in the early hours of 26th April 

•Despite increasing gas supply , due to grid constraints, power sent out remains limited   


Domestic Commodity Prices Movement   


 Stock Market

Oil prices  

• Brent crude by 0.43% to $51.82pb

• Marginal increase driven by lower than expected US crude stock at 897,000 barrels

• Oil price under pressure with rising US crude production

• OPEC’s oil production at 31.9mbpd remains close to record high levels 

Oil markets today


Outlook – Oil Prices

• Bearish outlook for oil due to unrelenting US supply 

• US increasing oil production will continue to set the tone for oil price 

• Russian oil production expected to increase to the highest in 30 years  

Outlook – Agric Prices 

• Supply expected to fall due to unfavourable weather conditions  


      Subsidies for sugar producers expected to dampen prices further

      Prices will remain under pressure from huge global supply from Ivory Coast 

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