January 22, 2024/CSL Research
Based on reports from the National Bureau of Statistics (NBS) the price of Automotive Gas Oil (Diesel) grew by 37.76% y/y and 6.74% m/m to an average price of N1,126.69/litre in December 2023 across the states of Nigeria from N817.86/litre and N1,055.57/litre recorded in December 2022 and November 2023 respectively. In the period, the highest average prices of N1,300.00/litre and N1,250.00/litre were recorded in Sokoto and Yobe states while Rivers and Bayelsa states recorded the lowest average diesel price of N897.86/litre and N935.00/litre respectively.
Similarly, the average price of Kerosene grew to N1,362.27/litre in December 2023 from N1,104.61/litre and N1,287.10/litre in December 2022 and November 2023 respectively whilst its gallon price increased to N4,529.92, up by 20.69% y/y from N3,753.38 in the prior year while dropping by 1.17% m/m. The other cooking option, Gas had an average price of N4,962.87/5kg and N11,510.16/12kg which is a growth of 8.70% y/y and 12.31% y/y from
N4,565.56/5kg and N10,248.97/12kg in December 2023.
Premium Motor Spirit (PMS) popularly referred to as petrol sold at an average price of N671.86/litre across the states of Nigeria in December 2023, a 225.85% y/y rise in price when compared to the average PMS price of N206.19/litre recorded in December 2022 reflecting the steep price increase following the removal of the subsidy on petrol. Month on month, crude oil price grew by 3.53% m/m from N648.93/litre in November 2023. It is expected that the price of petrol should begin to show the fluctuations in price observed with prices of diesel and other deregulated petroleum products.
Prices of petroleum products are both a function of movement in crude oil prices and of exchange rate changes. The removal of the fuel subsidy by the new administration resulted in a significant increase in the price of PMS and prices fluctuated in the first few months after the removal.
As global crude oil prices rise, the cost of refined petroleum products also rise in tandem. Again, the depreciation of the nation’s currency will lead to higher costs of importing petroleum products. In a liberalized market, prices will likely continue to fluctuate with movements in crude prices and the depreciation of the currency except the subsidy is reintroduced.
