Fuel price stabilises at N115 per litre, says NBS

• Hits N155 in Bayelsa

The average price of Premium Motor Spirit (PMS), otherwise known as petrol, hit N112.3 per litre in the 36 states of the federation, including the Federal Capital Territory (FCT), in June, according to data from the National Bureau of Statistics (NBS). The statistics released by FBN Capital Research showed that this price was collected by filling stations across the country with impunity from households in June while agencies of government kept mute. The Petroleum Products and Pricing Regulatory Agency (PPPRA) shows an average open market price for PMS for June of N130.0/l, indicating a subsidy cost of N43 for the month. “Earlier this month, the NBS released a report entitled premium motor spirit (PMS) price watch. It shows the average monthly prices for PMS paid by households across the country,” analysts at the FBN Capital said.

“This amounted in June to N112.3/litre (l) for the 36 states of the federation, including the FCT, and so well above the fixed retail pump price of N87/l set by the previous administration in February.” Besides, it noted that the average price of gasoline in June represented a 7.3 per cent y/y increase from the corresponding period in 2014, stressing that Bayelsa State had the highest price for PMS at N155/l, while Zamfara State had the lowest with N93 per litre. “We can see that distance from an import landing terminal is not the principal driver of relative costs in the different states.” Noting that headline inflation rose from nine per cent year per year to 9.2 per cent in June, FBN Capital said that the major factor was the then persistent fuel shortages, which pushed up transportation costs.

Tasking President Muhammadu Buhari to re-consider removal of fuel subsidy, the experts said that there is a fiscal necessity for subsidy removal. FBN Capital said: “President Buhari recently expressed his hesitation towards an immediate removal of the fuel subsidies due to the unquantified social effects. This marked a change in nuance from his election campaigning. “Government’s ability to keep the subsidy programme intact is quite limited, considering the implied subsidy from the PPPRA template, not to mention the recent dip in the global crude oil price and the recurring difficulties in placing Nigerian crude on the international markets. “While immediate deregulation is not proposed, it is unclear how long the system can be maintained. It may be that the authorities are working on palliatives to soften the blow of subsidy removal, mindful of the protests at the last attempt in January 2012.”