How Much Did Nigerian Households Pay For Diesel?? For November 2016

If Mr. XYZ who lives in Nigeria had negotiated a forward contract for the supply of diesel to his household for November 2016 around November 2015 period.

Is it safe to say that Mr. XYZ would have successfully hedge against the price risk relating to diesel???? .Well the answer is Mr. XYZ would have registered significant savings depending on his given location within the country.It is no secret that the purchase price of diesel in Nigeria has changed  across various  locations (i.e. States) there is exist some sort of price disparity.

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The chart above tell us that the price of Diesel in Nigeria moved significantly across some states of the federal republic of Nigeria over a 3 month period.

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From the table above we also carried out year over year analysis of the price of diesel paid by Nigerian households and business, Along with the various price differentials .

The location  with the highest price differentials  is Zamfara state within the north west geopolitical region of Nigeria with about N56.46k higher than Nov 2015 price of diesel.

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From the chart above  we can clearly observe that  year over year purchase price of diesel by households in Nigerians at various geopolitical zones shows a significant movement in the price of diesel from Nov 2015 to Nov 2016.

In conclusion it safe to say that households in Nigeria are mostly like going to have to deal with more price fluctuations of diesel . Households and business  may have to take more proactive measures towards preparing  themselves for the  challenges ahead.

How Much Did Nigerian Households Pay For Petrol?? For April and May 2016

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Well it is no longer  news that the price of petrol in Nigerian has change  from N86.5k  to N145. Today we examine from the data if  government policy actually corrected some of price anomalies that characterized the petrol scarcity crisis which  rocked the country early this year.

Data clearly shows how some states have benefited from the new price adjustments (paid less compared to the previous periods during  petrol scarcity ) some examples include states like Ekiti which once paid N202.78k as at April 2016 but after government`s new price policy implementation, average purchase price of petrol by households as at May 2016 stood at N156.39k representing a 22.87% fall in price.
Anambra which once paid N193.85k as at April 2016 after government`s new policy implementation,average purchase price of petrol by households as at May 2016 stood at N147.08k representing a 24.13% fall in price.

However the same cannot be said for all states within the federation , as some states which enjoyed preferential treatment with regards to the old price and supply regulation policies ,now pay  more following the new policy by government.
For instance Lagos which once paid an average price of N92.59k as at April 2016 after government`s new policy implementation,average purchase price of petrol by households as at May 2016 stood at N144.75k  representing a 56.33% rise in price.
The Federal Capital Territory which once paid an average price of N107 as at April 2016 after government`s new policy implementation,
average purchase price of petrol by households as at May 2016 stood at N145 representing a 35.51% rise in price.

We await  June 2016 data  release by Nbs for further interpretation .

 

 

Price Movements of Petrol In Nigeria From 1994 – 2016

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Over the years  price of petrol  as been regulated by various successive governments in Nigeria. In 2012 the Federal government announced the complete removal of petrol subsidy (Petrol was priced at N141 naira per liter )  which lead to a nationwide protests after which the government agreed to a partial removal of subsidy (Petrol was priced at N97 naira  per liter ).

In Jan 2015 government announced a price decrease in the regulated price of petrol (Petrol was priced at N87  naira  per liter ). In January 2016  government also announced another  price decrease  (Petrol was Priced at N86.50  naira  per liter )

Today the  country is currently  experiencing fuel supply challenges , government has announced a new price hike on 11th may 2016  signaling the removal of petrol subsidy (Petrol now priced  at N145 naira  per liter ).

Will this new policy finally ease supply challenges and stimulate more investment into the petroleum sector??????

Is The Price Of Petrol At Par Across States Within Nigeria ???

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If you are living in Nigeria then you must be familiar with the petrol crisis   that occurred some weeks ago where many Nigerians had great difficulty in buying petrol for their cars and generators . Many experts offer diverse opinions with regards to the cause and solutions to the petrol crisis.

Presently the government officially pegged the price of  petrol at N86.50 per liter, some have argued that its not just possible to have a uniform price of petrol across the entire country owing to many differentiated variable cost due to diverse distribution challenges of conveying products from source  to various locations.

 

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Presently Nigeria has about 3  petroleum refineries which are not yet operating at optimal capacity hence the government has to import petrol from overseas to meet up with the shortfall.

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From the chart above Lagos state has one of the lowest average purchase price of petrol paid by households, one very important factor responsible for this situation is the presence of a sea port in Lagos  through which importation  of petrol is facilitated . Also note Lagos does not have any petroleum refinery .

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From the charts above there exist price disparity among various geopolitical zones in the country.South west with the  lowest average purchase price of petrol paid by households and  south east has the highest purchase price paid by households.

In conclusion it very much safe to say that the price of petrol in Nigeria is not at par across the entire  states , because some states have certain comparative advantages (closeness to source ) and challenges (high distribution cost).