Improved FX Access for Petroleum Marketers

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November 13, 2017/FBNQuest Research  

The National Bureau of Statistics (NBS) has released its latest premium motor spirit (PMS) price watch report. It shows the average monthly price for PMS (petrol/gasoline) paid by households across the country. In August it averaged N144.5/litre (l) for the 36 states of the federation and the FCT, and therefore was marginally below the fixed upper price limit for the retail pump price of N145/l set by the authorities. 

The average price of gasoline in September represented a -1.2% y/y decrease, but increased by 0.1% m/m. Yobe State recorded the highest price for PMS at N149.7/l while Abuja recorded the lowest – N142.0/l.   

A recent survey carried out by the NNPC revealed that for most stations, fuel prices reduced in line with the prevailing market situation in order to sustain the turnover of the business and to attract more motorists. 

Additionally, the CBN’s increased fx interventions have led to improved fx liquidity. For petroleum marketers, the CBN recently approved access to its fx official windows, thereby allowing for a better fx blend as opposed to depending solely on the parallel market.

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The NNPC has begun resuscitating some of its critical pipelines across the country. This should assist with enhancing efficiency in distribution as well as push down prices of petroleum products. 
There has been increased private sector interest in petroleum refining. The country’s current refining capacity utilisation is c.10%.  Earlier this month, the federal ministry of petroleum resources received applications for seven modular refineries in Edo State. Three of these applications are currently at the approval stage.