PPPRA Price Adjustment Strategy Evaluation (Nov 2014-Jan 2015)

1. Nigeria Downstream Brief | Vol_2 Jan 30th 2015
PPPRA Price Adjustment Strategy Evaluation (Nov 2014-Jan 2015)
In order to understand and evaluate PPPRA’s Price Adjustment Strategy for the period(s) spanning
November 2014 to January 16th 2015; the price adjustments made were mirrored against the daily Opec
Basket prices for the same period.
From the analysis, it appears that PPPRA price adjustments were made constant for a period of 44days in the
face of dropping crude oil prices over the same period. This delay in price adjustment could have only
increased the OMP and the subsidy borne by Nigerians and Government. This delay in price adjustment also
occurred between 29th December and 16th January 2015.
While the decision to reduce the regulated price for PMS to N87 per liter is commendable, it was rather
belated as the opportunity to create a positive perception by consistently reducing the OMP against falling
oil prices was missed by Government .
PPPRA Price Adjustment decision for these periods are given a Barely Fair Value from our traffic light rating.
Decision
Rating
 Barely Fair
Source: PPPRA Templates (2009-2015)
Opec Crude Oil Open Basket Regime
Authors Analysis
0
20
40
60
80
100
120
140
21-Oct
24-Oct
27-Oct
30-Oct
2-Nov
5-Nov
8-Nov
11-Nov
14-Nov
17-Nov
20-Nov
23-Nov
26-Nov
29-Nov
2-Dec
5-Dec
8-Dec
11-Dec
14-Dec
17-Dec
20-Dec
23-Dec
26-Dec
29-Dec
1-Jan
4-Jan
7-Jan
10-Jan
13-Jan
16-Jan
19-Jan
22-Jan
25-Jan
28-Jan
31-Jan
November-14 December-14 January-15
PPPRA Refined Product Price -Adjustment Strategy Evaluation
(Nov 2014-Jan 2015)
PMS ($/bbl) DPK ($/bbl) AGO ($/bbl) FO ($/bbl) Opec Crude Oil Basket Price $/bbl