Petroleum importers record improved access to forex

Posted by Foster Obi, Lagos | 14 November 2017 | 1,390 times

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There are indications that petroleum marketers in the country may be experiencing improved access to foreign exchange for petroleum importation, according to the latest release of the Premium Motor Spirit (PMS) price watch report by the National Bureau of Statistics (NBS).

The report, which shows the average monthly price for PMS paid by households across the country, indicates that the price averaged N144.5 per litre in the 36 states of the federation and the Federal Capital Territory, which was marginally below the fixed upper price limit for the retail pump price of N145 per litre set by the regulators.

The average price of petrol in September represented a -1.2 per cent year-on-year decrease, but increased by 0.1 per cent month-on-month. From the report, Yobe State recorded the highest price for PMS at N149.7 per litre, while Abuja recorded the lowest at N142.0 per litre.  

A survey carried out recently by the Nigerian National Petroleum Corporation (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.

Also from investigations, the Central Bank of Nigeria’s (CBN) increased foreign exchange interventions have led to improved liquidity. For petroleum marketers, the CBN recently approved access to its foreign exchange official windows, thereby allowing for a better blend as opposed to depending solely on the parallel market.

On its part, the NNPC said it has begun resuscitating some of its critical pipelines across the country. This, analysts believe, should assist in enhancing efficiency in distribution as well as push down prices of petroleum products.

Before now, marketers had bitterly complained of scarcity of foreign exchange to finance PMS importation and the high exchange rate, which they said has been driving them out of business.

Also at the public hearing on the review of price template of premium motor spirit earlier in the year, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) had argued that when the price of petrol was reviewed from N97 to N145 per litre in May 2016, the exchange rate was based on N285 to a US dollar, while the exchange rate has been fluctuating between N305 and N490 to a dollar since June 2016 till date.

It also noted that the cost of product with freight charge and other cost elements in the Petroleum Product Pricing Regulatory Agency (PPPRA) template make the landing cost to be N145.09 per litre at the official rate of N305 per dollar or N222.23 per litre, using the parallel market rate of N490 to a dollar.

The marketers proposed N165 per litre to cover the cost of foreign exchange required for products importation, as the free fall of the Naira against the dollar is seriously impacting on the pump price.

However, the PPPRA keeps assuring the public that existing price band of N135-145 per litre was still okay and, therefore, no basis for increase in the pump price of premium motor spirit.

The NNPC equally assured there is no immediate plan to increase the pump price of petrol.


Source: News Express

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