…FG raking in N1.31bn profit daily

By Michael Eboh

Petrol

 The persistent decline in the price of crude oil in the international market on Thursday  forced down the price of Premium Motor Spirit, also known as petrol in the Nigerian market, as data released yesterday, by the Petroleum Products Pricing Regulatory Agency, PPPRA, revealed that the market price of PMS has dropped to N112.26 per litre.

This, according to the Pricing Template of the PPPRA, was the Expected Open Market Price, EOMP, price of petrol as at the close of business, Wednesday, March 11, 2020.

This price as at Wednesday, N112.26 per litre, represented a decline of 2.02 per cent compared to the expected open market price of N114.53 per litre recorded on Tuesday, March 10, 2020.

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It also means that at the current regulated price of N145 per litre, the Federal Government is making a gain of 32.74 per litre. This means that at an estimated fuel consumption rate of 40 million litres daily, the Federal Government is making a profit of N1.309 billion daily.

Giving a breakdown of the PMS pricing template, the PPPRA disclosed that cost plus freight of PMS to Nigeria stood at $369.62 per metric tonne, an equivalent of N84.60 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, NIMASA, 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 N92.89 per litre.

Adding the total distribution margins of N19.37 per litre to the Landing Cost of N92.89 per litre, the PPPRA put the Expected Open Market Price, EOMP, of the commodity at N112.26 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 comprise Ex-depot price, inclusive of bridging allowance, Marine Transportation Allowance, MTA, and administrative charge.

Meanwhile, as at 6pm, Thursday, the prices of crude oil the international market continued its decline, as WTI crude dipped by 5.34 per cent to $31.22 per barrel; Brent crude also recorded a decline, dropping by 7.74 per cent to $33.02 per barrel; while the price of Bonny Light, Nigeria’s flagship crude, dipped by 0.68 per cent to $36.49 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, put 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.

Vanguard