By Michael Eboh
Following the consistent decline in crude oil price in the international market, the price of Premium Motor Spirit, PMS, also known as petrol, in the Nigerian market dropped to N114.53 per litre, effectively eliminating subsidy payment on the commodity.
This is according to data for PMS price for Tuesday, March 10, obtained from the Pricing Template for the commodity, released yesterday, by the Petroleum Products Pricing Regulatory Agency, PPPRA.
This means that going by the regulated price of N145 per litre, the Federal Government is currently making a profit of N30.47 per litre of fuel.
Giving a breakdown of the PMS pricing template, the PPPRA disclosed that cost plus freight of PMS to Nigeria stood at $379.37 per metric tonne, an equivalent of N86.84 per litre; while lightering expenses stood at N2.75 per litre and Nigerian Ports Authority charges stood at N0.84 per litre.
Nigerian Maritime Administration and Safety Agency charges stood at N0.22 per litre; jetty throughput charge N0.60; storage charge N2; and financing cost N1.92; putting the landing cost of PMS at N95.16 per litre.
Adding the total distribution margins of N19.37 per litre to the Landing Cost of N95.16 per litre, the PPPRA put the Expected Open Market Price, EOMP, of the commodity at N114.53 per litre.
However, the PPPRA template revealed that the ex-depot price of the commodity, which is the price at which the NNPC sells to oil marketers, currently stands at N125.63 per litre; while the Ex-depot price for collection stood at N133.28 per litre.
The PPPRA explained that Ex-depot for collect price comprises Ex-depot price, inclusive of bridging allowance, Marine Transportation Allowance, MTA, and an administrative charge.
The Expected Open Market Price, EOMP, of the commodity had risen to N116.22 per litre as at Monday, March 9, 2020, before dropping by 1.45 per cent to N114.53 per litre on Tuesday.
Meanwhile, as at 5pm Wednesday, the prices of crude oil the international market continued its decline, as WTI crude dipped by 2.62 per cent to $33.46 per barrel; Brent crude also recorded a decline, dropping by 2.47 per cent to $36.30 per barrel; while the price of Bonny Light, Nigeria’s flagship crude, dipped by 1.29 per cent to $36.74 per barrel.
The Federal Government, through the Nigerian National Petroleum Corporation, NNPC, had paid N43.09 billion as subsidy on PMS in the month of February 2020.
According to data obtained from the PPPRA, the amount paid as subsidy in January 2020 represented a decline of 22.47 per cent when compared with the N55.58 billion paid by the Federal Government to subsidise the commodity in December 2019.
Figures gleaned from the PPPRA’s PMS Pricing Templates and Daily Truck-Out Reports for January 2020, but the average Expected Open Market Price, EOMP, of PMS at N171.27 per litre, meaning that at a regulated price of N145 per litre, the Federal Government paid an average of N26.27 per litre as subsidy on fuel in January.
In addition, the PPPRA reports stated that a total of 1.591 billion litres of petrol was supplied across Nigeria in 30 days out of the 31 days in the month under review, translating to an average daily PMS supply of 53.033 million litres.
Therefore, paying an average of N26.27 per litre on an average PMS supply of 1.591 billion litres, meant that the federal government spent N43.09 billion to subsidise PMS for Nigerians in January 2020 alone.