The average pump price of premium motor spirit (Petrol) decreased by 0.3% in February, according to the latest price watch data released by the National Bureau of Statistics (NBS).
- Petrol pump price fell to an average price of ₦145.30 in February
- States with the highest average price of Petrol were Oyo (₦146.50), Plateau (₦146.55) and Taraba (₦150.55).
- States with the lowest average price of Petrol were Ogun (₦143.06), Imo (₦143.18) and Ekiti (₦143.47)
Petrol Pump Price was highest in Taraba State
Taraba state witnessed the highest average price, as petrol was sold at an average of ₦150.55 per liter. Month-on-month, the average prices of Petrol in the state dropped by 0.37%.
Also, Plateau state ranked second, with an average pump price of ₦146.55 per liter. Month-on-month, the average price of Petrol in the state dropped by 0.09%.
Oyo state also witnessed a high average Petrol pump price of 146.50 per liter. In February, the state witnessed a decline of 2.66% as against 3.40% price increase in January 2019.
Petrol consumers in Ekiti State witnessed low pump prices
The average pump price of petrol in Ekiti State was the lowest in the country, as the commodity was sold at just ₦143.47. Month-on-Month, the average pump price dropped by 0.37%. Year-on-year, it also dropped by 20.81%.
Imo state ranked second with an average petrol pump price of ₦143.18 in February. This represents a 0.67% price decline month-on-month.
Also, the average pump price of Petrol in Ogun was ₦143.06 in February. Month-on-month, it declines by 2.72%.
Northeast Zone witnessed highest average pump price
Across the six geopolitical zones, the Northeast once again maintained the highest average pump price of ₦145.74 in February. The zone ranked second with the highest average pump price of ₦145.74,
The remaining zones are ranked in these order – Northwest (₦145.41), South-South (₦145.09), Southwest (₦144.90) and South-South (₦145.09) in these order.
What the reduction in petrol price could implies
Petrol is an important source of alternative energy for both individuals and firms. Hence, the reduction in the pump price of the commodity could lead to corresponding reduction in the operating cost of small and medium scale enterprises (SMEs). This means a reduction in the cost of production, leading to an increase in revenue.
Also, the reduction in the price of petrol could result in a reduction in the prices of goods and by extension, an increase in the purchasing power of consumers.
How stocks and firms react
Major stakeholders operating in the downstream oil and gas sector are likely to be affected by the slight reduction in the prices of Petrol. Essentially, the downstream oil and gas operators are involved in the marketing and distribution of refined petroleum product.
Hence, if the drop in the average price of Petrol is not complemented with an increase in demand for Petrol consumption, revenues will fall and companies stocks also affected.
On the other side, the non-oil companies, particularly the manufacturing and firms in the fast moving consumer goods (FMCG) space may be positively affected by reducing their operating costs.