- Average price of petrol in May was ₦205.67.
- Average price of petrol decreased by 0.8% month on month in May.
- Average price of petrol decreased by 0.3% year on year in May.
- Borno State recorded highest average petrol price of ₦166.08 in May.
- Katsina State recorded lowest average petrol price of ₦162.27 in May.
The Nigeria Bureau of Statistics (NBS) has released the Premium Motor Spirit (Petrol) Price Watch for the month of May, 2018. The NBS report shows that average price paid by consumers for Premium Motor Spirit popularly known as petrol decreased by 0.3% year-on-year and 0.8% month-on-month to ₦150.2 in May, 2018, from ₦151.4 in April, 2018.
According to the report, the average Premium Motor Spirit (Petrol) price across the zones in the country shows that the North-East zone recorded the highest average price of ₦153.67. It was closely followed by the South-South zone, where consumers paid average of ₦151.60 for petrol while the South-East and North-Central zones recorded the lowest prices of ₦148.45 and ₦149.58 respectively for petrol, in the same month of May.
However, during the month under review, the NBS report reveals that Borno State has the highest average price of Premium Motor Spirit in May, 2018, with ₦166.08. The second state is Benue, where Premium Motor Spirit (Petrol) was sold at an average price of ₦160.31 in May, 2018, while Akwa Ibom State came third with an average price of ₦159.44 in the month of May.
The report also shows that Katsina State has the lowest average price of Premium Motor Spirit (petrol) in of ₦144.82. Closely followed by Kano State with ₦144.87 and Bauchi state with an average price of ₦186.93 during the period under review.
Meanwhile, the report released by NBS also shows that the 12 months average prices for Premium Motor Spirit (petrol) was ₦150.70 in May, 2017, ₦145.6 in November, 2017, and ₦144.4 in August, 2017. Other 12 months average prices for petrol include ₦190.9 in January, 2018, and ₦151.4 in April, 2018.
This little fall in the prices of Premium Motor Spirit (Petrol) could lead to a corresponding small reduction in the operating costs of small and medium scale businesses, since they rely on petrol as an alternative source of power. Hence, it may lead to a small increase in revenue for them.
Effects on Stocks
Reduction in Premium Motor Spirit (Petrol) prices could have a negative effect on the revenues (and by extension, on stocks) of companies operating in the downstream oil and gas space. These downstream companies are involved in the distribution and marketing of refined Premium Motor Spirit (Petrol). These companies include Mobil, Conoil, Capital Oil, Total, Oando, Forte Oil, Japaul Oil and Eterna Oil etc. These companies make money selling Premium Motor Spirit. Depending on their share of the volume of sales, their revenues and profits may also drop.
However, for non-oil and gas companies particularly the manufacturing firms in the Industrial and FMCG space, reduction in the cost of Premium Motor Spirit (Petrol) may positively affect the bottom-lines for these companies by reducing their operating costs. These firms often rely on petrol to power their vehicles as well as backup for their power, hence, they report all these as expenses.