The Nigerian National Petroleum Corporation (NNPC) and marketers of premium motor spirit (PMS) are raking about N386.8 million from Nigerians daily, the new pricing template released by the Petroleum Products Pricing Regulating Agency (PPPRA) has revealed.
The template released on February 2 revealed that the expected open market price (EOMP) of fuel is now N76.83, a N9.17 and N9.67 higher than the regulated price of N86.00 and N86.50 price, which the product is sold at the NNPC filling stations and private filling stations. Government has earlier announced N86.50 as the official pump price of premium motor spirit (PMS), while it is expected to sell at N86.00 at NNPC stations, with effect from January 1, 2016. Based on the regulated prices for the NNPC station, investigation by New Telegraph revealed that about N366.8 million is made from the estimated 40 million litres consumed by Nigerians daily.
However, with the N86.50 price, which the product is sold at the private stations, the marketers, starting from February 2, 2016, when the PPPRA released the new template, raked in N386.8 million daily. Based on Average Platts’ Prices for February 2, 2016, the PPPRA said in the template published on its website that the expected open market price (EOMP) (naira/litre), which is the landing cost plus margins was N76.83.
The breakdown showed that the landing cost of fuel is now N62.53, while the Jetty Depot Thru’ Put Charge is N0.60 per litre. The lightering expenses on every litre of the product is N2.02, the Nigeria Port Authority (NPA) charge is N0.36 per litre, storage charge is N2.00, the distribution margins/subtotal margins are N14.30 per litre.
“All these made the ex-depot (for collection) to be N76.50 per litre. Under/ Over Recovery is N9.67 based on retail price of N86.50 per litre,” the template showed.
The Federal Government had earlier announced the reduction in the official pump price of Premium Motor Spirit (PMS), with effect from January 1, 2016. Executive Secretary of the PPPRA, Farouk Ahmed, who announced this, said that PMS would be sold at N86 per litre at retail stations owned and operated nationwide by the Nigerian National Petroleum Corporation (NNPC), while other oil marketers would sell at N86.50 per litre.
Before this, Minister of State for Petroleum resources, Dr. Ibe Kachikwu, had earlier said that petrol would be sold for N85 per litre from January 1. Ahmed, however, explained that the reduction in the price of the commodity was due to an implementation of the revised components of the Petroleum Products Pricing Template for PMS and household kerosene.
According him, the revised template, which would be reviewed on quarterly basis, was geared towards ensuring an efficient and marketdriven price that would reflect current realities.
He noted: “Since 2007, while crude oil price had been moving up and down, the template remains the same. This made it necessary for us to introduce a mechanism whereby the template would be sensitive to the price of crude oil. “However, the template is not static, as there would be a quarterly review and if there is any major shift, the Minister of State for Petroleum Resources would be expected to call for a review, either upward or downward.“
If there is no major shift, the price would continue from January to March 2016. In addition, there would be a Product Pricing Advisory Committee that would be set up to advice the PPPRA concerning movements in the price of crude oil.”
The executive secretary added that the NNPC would sell lower than other oil marketers, due to the fact that it was cheaper for it to import, compared to both the independent and major oil marketers.
He listed the major components affected by the review in the pricing template to include Traders Margin, Lightering Expenses, Nigerian Port Authority (NPA) Charges and Jetty Throughput and Storage Charges, as well as Bridging Fund.