Petrol Would Sell N99.38 Per Litre Without Subsidy – PPPRA

The Federal Government on Monday said it
was currently subsidising 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 reveals that
for NNPC retail outlets and independent and
major oil marketers, landing cost of petrol
imported into the country is N84.32 and
N85.08 per litre, respectively.
It stated that the distribution margin,
which include 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.