Import differentials result in N884.8m losses weekly
The Nigeria’s downstream petroleum industry lost about N884.8 million in seven days to the high cost of importing Premium Motor Spirit (PMS), also known as petrol, resulting from a differential of N3.16 per litre.
Besides, Nigeria’s crude oil production, excluding condensate increased by 168,800 barrels per day in June.
With Nigeria’s petrol consumption put at 40 million litres per day, the country lost about N126.4 million daily to import differentials between June 30 to July 6, 2017, according to latest oil and gas data from the National Bureau of Statistics (NBS).
Specifically, despite capping PMS at N145 per litre, the average expected open market price of petrol rose to N148.16 during the period under review, thereby leading to a loss of N3.16 kobo a litre for importer of the product.
NBS, which made this disclosure in its weekly selected oil and gas data released yesterday, showed an average landing cost of N128.79 per litre and expected open market price of N148.16.
Checks by The Guardian revealed that despite the N3.16 lost per litre of product during the period under review, petrol still sold at the regulated price of N145 per litre, except for some states, which regularly sold the product above pump price.
The NBS data put the weekly average freight rates per 30,000 metric tonnes cargo at N16.92 per litre, landing cost, N128.79; expected open market price, N148.16, parallel market exchange rate at N366.20 to $1 and price of Nigeria’s Bonny Light at $48.40 per barrel.
Besides, data from the Organisation of Petroleum Exporting Countries (OPEC), showed that Nigeria’s crude oil production, excluding condensate increased by 168,800 bpd in June.
According to the OPEC monthly report released on Wednesday, Nigeria’s oil production, excluding condensate rose from the 1.494 million bpd in May to 1.663 million in June, resulting to an increase of 393,000 bpd over the previous month.
OPEC said crude oil output increased mostly in Libya, Nigeria, Angola, Iraq, and Saudi Arabia, while production declined in Venezuela during the period under review.
It stated: “A rebound in Libyan and Nigerian production added pressure to an already amply supplied Atlantic Basin, due to a massive increase in US shale oil production, while demand from Asia was weaker on account of upcoming refinery maintenance and unfavourable arbitrage economics.
“The prospect of increased supply also put some pressure on prices. Nigerian Forcados production ramped up quickly after it resumed in May, increasing to 250,000 bpd, creating an overhang as supply surpassed demand.
Regarding the petrol import differential, the Minister of State for Petroleum Resources, Ibe Kachikwu, in a recent podcast said NNPC is currently absorbing the differences in the prices.
Kachikwu said due to the rising cost petrol, a number of oil marketers had stopped importing the commodity, leaving the NNPC as the major importer of majority of the product into the country.