Sustaining current gains in diesel pricing
According to data from the National Bureau of Statistics (NBS), the average price paid by consumers for automotive gas oil (diesel) decreased by 5.65 percent month-on-month and increased by 45.35 percent year-on-year to N216.30 in May 2017 from N229.25 in April 2017.
A breakdown of the data indicated that states with the highest average price of diesel were Adamawa (N236.67), Niger (N236.43) & Sokoto (255.71). States with the lowest average price of diesel were Gombe & Yobe (N200.00), Delta (N200.83) and Anambra (N200.56).
But in June, the price fell on average price of the commodity has fallen by 42 percent across the country.
A national survey by Oil and Gas Forum, an NNPC media initiative indicated that in the last few weeks, the price of diesel has fallen steadily from between N175 and N200 per litre as at June 18, 2017, to as low as between N155 and N160 per litre in some stations across the country as at last week.
The study showed that NNPC Mega Stations and its affiliates across the country sold the product for N160 per litre while many major and independent marketers in Abuja, Lagos, Kaduna, Onitsha, Enugu, Makurdi and most major cities were selling between N160 and N165 per litre. In Port Harcourt the average price is as low as N150 per litre.
The Manager of a fuel retail station in Abuja, Ibrahim Isah, said the station had to reduce the selling price to N165 per litre in line with the prevailing market situation in order to sustain the turnover of the business.
An independent marketer in Makurdi, Innocent Abbah, said the going ex-depot price of diesel from tarmac or local private depots is N155 per litre.
However, the situation is slightly different in Asaba and Warri in Delta State and Uyo in Akwa Ibom state where most independent fuel stations as well as major marketers sold the product for N180 per litre.
The national oil company attributes this to a sustained improvement in the supply of the product and remodeling of the product distribution channels to address sufficiency issues across the country.
A recent release by the NNPC further attributes this fall in prices to the corporation’s robust engagement with critical downstream stakeholders such as Major Oil Marketers Association of Nigeria (MOMAN), Nigerian Association of Road Transport Owners (NARTO), Petroleum Tanker Drivers (PTD) as well as Independent Petroleum Marketers, leading to the resolution of salient issues.
The corporation said it has also taken huge steps to resuscitate some of its critical pipelines and depots such as the Atlas Cove-Mosimi Depot Pipeline, Port-Harcourt Refinery – Aba Depot Pipeline, Kaduna – Kano Pipeline and the Kano Depot which have enhanced efficiency in the distribution of AGO. Efforts are also ongoing to revamp and re-commission other critical pipelines and depots across the country.
In addition to these, the NNPC says that as a result of consistent positive engagement with the Central Bank of Nigeria (CBN), the corporation has equally achieved the expansion of the Premium Motor Spirit (PMS) Foreign Exchange Intervention Scheme to accommodate diesel and aviation fuel.
The challenge now before the NNPC is to sustain these gains in diesel pricing as poor power supply continues to hamper manufacturing sector. The gains will also impact on independent power projects in manufacturing clusters around the industrial hubs in Lagos.
Further, the corporation has to ease the process of transporting the product around the country as the use of tankers becomes increasingly challenging. Movement of petroleum products through rail lines will help to deepen distribution and improve supply nationwide.
ISAAC ANYAOGU