- Average price of petrol in June was ₦148.1.
- Average price of petrol decreased by 1.4% month on month in June.
- Average price of petrol decreased by 1.5% year on year in June.
- Borno State recorded highest average petrol price of ₦162.17 in June.
- Oyo State recorded lowest average petrol price of ₦144.30 in June.
The Nigeria Bureau of Statistics (NBS) has released the Premium Motor Spirit (popularly known as Petrol) Price Watch for the month of June, 2018. The NBS report shows that average price paid by consumers for PMS decreased by 1.5% year-on-year and 1.4% month-on-month to ₦148.1 in June, 2018, from ₦150.2 in May, 2018.
According to the report, the average price of PMS across the zones in the country shows that the Northeast recorded the highest average price of ₦150.41. It was closely followed by the Northwest zone, where consumers paid average of ₦149.70 for petrol while the Southwest and North Central recorded the lowest prices of ₦145.52 and ₦146.68 respectively for petrol, in the same month of June.
However, during the month under review, the NBS report revealedthat Borno State has the highest average price of the product in June, 2018, with ₦162.17. The second state is Kebbi, where petrol was sold at an average price of ₦158.24 in June, 2018, while Sokoto State came third with an average price of ₦154.20 in the month of June.
The report also shows that Oyo State has the lowest average price of PMS in June (₦144.30). Closely followed by Abuja with ₦144.50 and Lagos State with an average price of ₦144.90 during the period under review.
Meanwhile, the report released by NBS also shows that the 12 months average prices for petrol was ₦150.30 in June, 2017, ₦171.8 in December, 2017, and ₦144.5 in September, 2017. Other 12 months average prices for petrol include ₦190.9 in February, 2018, and ₦151.4 in April, 2018.
This little fall in the prices of PMS could lead to a corresponding small reduction in the operating costs of small and medium scale businesses (SMEs), 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 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 petrol. They companies include Mobil, Conoil, Capital Oil, Total, Oando, Forte Oil, Japaul Oil and Eterna Oil etc. hese 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 price of 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.