The Federal Government on Monday said it was currently subsidising Premium Motor
Spirit (PMS) otherwise known as petrol at N12.62 per litre.
It said that the subsidy figure was for petrol imported directly by the Nigerian National
Petroleum Corporation (NNPC) and dispensed at its retail outlets, while the rate was
N12.88 per litre for other oil marketers. This is contained in the latest Petroleum
Product Pricing Regulatory Agency (PPPRA) Template released in Abuja.
It said that although provision was not made for subsidy in the 2016 budget, it would
be defrayed from “recoveries’’ made by the country from oil transactions in the first
quarter of 2016. According to the agency, between January and March, 2016, the
Federal Government was able to save about N10 billion as a result of selling the
product above the Expected Open Market Price.
It explained that without the subsidy and given the landing cost of the product, it ought
to be sold at N98.62 per litre at NNPC outlets and at N99.38 per litre by major and
independent oil marketers. According to the template, the expected open market price
is the actual price of the product without subsidy and it was based on the current
exchange rate of N197 to a dollar.
A breakdown of the template revealed that for NNPC retail outlets and independent and
major oil marketers, landing cost of PMS imported into the country was N84.32 and
N85.08 per litre, respectively. It stated that the distribution margin, which included
retailers, transportation, bridging fund and dealers margin stood at N14.30 for both
NNPC and other marketers.
“This brings the current Expected Open Market Price to N98.62 and N99.38 for NNPC
retail outlets and other marketers respectively,” it said.
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