Some Relief for Petroleum Marketers

Oil & Gas
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Monday, October 9, 2017 8:59 AM/ FBNQuest Research                                                                                        

The National Bureau of Statistics (NBS) has released its latest report in its premium motor spirit (PMS) price watch series. The report shows the average monthly price for PMS (petrol/gasoline) paid by households across the country. 

In August it averaged N144.4/litre (l) for the 36 states of the federation and the FCT, and therefore now below the fixed upper price limit for the retail pump price of N145/l set by the authorities. We attribute this decline partly to the CBN’s stepped up interventions which have resulted in reduced port charges. 

The average price of gasoline in August represented a -2.5% m/m decrease. Plateau State recorded the highest price for PMS at N146.4/l while Nasarawa recorded the lowest with N143.0/l. 

It seems the CBN’s efforts to boost fx liquidity have yielded some positive results in the downstream sector. Initially, oil marketers depended solely on the parallel market rate to settle their port charges. However, through a recent circular, the CBN has approved access to its official windows. 

Banks can now accept requests for the payment of port charges and forward them to the CBN’s fx window, which amounts to a welcome and sizeable saving. 

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Given the FGN’s intention to reduce PMS imports considerably over the next two years, the NNPC has begun its own plans for the rehabilitation of the existing refineries. Industry sources suggest that the total rehabilitation cost is US$1bn. 

Nigeria’s current refining capacity utilisation is c.13% 

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