The Federal Government is still spending about N1.81bn daily to subsidise the Premium Motor Spirit, otherwise called petrol, notwithstanding the nationwide scarcity of the product.
Latest figures from the Petroleum Products Pricing Regulatory Agency show that the government is paying N45.28 as subsidy for every litre of petrol consumed in Nigeria.
Specifically, the agency, in its pricing template released on May 21, 2015, based on prices for May 20, 2015, stated that the Expected Open Market price or total cost for petrol was N132.28 per litre.
This was against a retail regulated price of N87 per litre. The difference between the EOMP and the retail price is therefore N45.28.
According to the Nigerian National Petroleum Corporation, Nigeria consumes about 40 million litres of the PMS daily.
Multiplying the amount of fuel consumed across the country on a daily basis with the current amount spent on subsidising the product, it means that the government spends about N1.81bn on subsidy daily, provided the N45.28 per litre subsidy figure persists.
The PPPRA stated that the effective date of the approved pricing template was January 19, 2015, noting that the actual landing cost of the product was N116.79 per litre.
The cost elements that make up the landing cost include the product’s offshore cost, N104.87; trade margin, N1.47; lightering expenses, N4.19; NPA, N0.77; financing, N1.68; jetty depot throughput charge, N0.8; and storage charge, N3.
On the cost of the product’s distribution margin, according to the agency, retailers get N4.6; transporters, N2.99; dealers, N1.75; bridging cost is N5.85; marine transport average, N0.15; and the admin charge, N0.15. The sub-total margin stands at N15.49.
When added to the landing cost of N116.79, an EOMP of N132.28 per litre is arrived at. But this is subsidised and a flat official rate of N87 per litre is given.
Meanwhile, many independent marketers hardly sell at the regulated N87 price since the latest scarcity of petrol started.
Aside from the NNPC petrol stations and some outlets belonging to major oil marketers such as Conoil, Total, Mobil, Oando, Forte Oil, most other filling stations sell the product above the regulated price despite the fact that the subsidy by the Federal Government is still in place.
The scarcity of fuel has continued throughout the country.
In Abuja, many motorists spend quality man-hours in fuel queues, especially at filling stations where the product is sold at the regulated pump price.
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