There are indications that the Federal Government (FG) may be making over N2billion from the sale of petrol as crude oil prices crashed to less than $30 per barrel while pump price of premium motor spirit (PMS) otherwise called petrol is reduced to N125 per litre by the Nigerian National Petroleum Corporation (NNPC) from N145 per litre.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, on behalf of FG, had directed a downward review of the pump price of petrol on Wednesday.
However, following the last pricing template for petrol published on the website of the PPPRA before it was brought down, the landing cost for petrol, as at 16th March 2020, was N64.32 per litre. By adding the total margins of N19.37 for marketers, the Expected Open Market Price (EOMP) was N83.69.
It is noteworthy to state that crude oil price was selling at $30 per barrel on 16th March 2020.
On Thursday as at 18.45GMT, Brent crude was selling at $30.17 per barrel while OPEC Basket was selling at $27.31 per barrel.
By implications, the difference between N125 – N83.69 is N41.31 per litre. Therefore, on the average of 50 million liters daily consumption of petrol, FG is making an excess or surplus of (41.31 x 50million litres) N2,065,500,000 daily from the sale of petrol to Nigerians at N125 per litre.
This means the recommended retail price of N125 per litre is very much higher than what should have been the price if determined by the forces of demand and supply.
Industry sources posited that the FG can afford to sell petrol at N100 per liter without subsidy payment whenever crude oil sells at less than $30 per barrel.
Dolapo Oni, a former Head of Energy Research at Ecobank Plc who is now an Energy Consultant, told Nigerian Tribune that “as at today, there is no subsidy. More importantly, going forward as we bring in cargo prices at the current Freight On Board (FOB) prices, it (pump price of petrol) should go lower. As of March 16, 2020, landing cost was N64.32 per litre, Margin was N19.37 per litre, and EOMP was N83.69 per litre.
“By the time we get to Friday, we could be looking at EOMP of N75 per litre or less granting NNPC a surplus of over N50 per litre. This should more than cover whatever losses they accrue from selling the old stock that landed at a higher cost than N145 per litre at N125 per litre.”
Moreover, Investigation by the Tribune Online revealed that marketers are yet to comply with the federal government’s directive on reduction in the pump price of petrol from N145 per liter to N125 per litre.
All the filling stations visited by our Correspondent revealed that only NNPC Retail stations in Ikoyi, Owode and Ojota were selling at the approved recommended price of N125 per litre.
From Conoil and Total filling stations at toll-gate area of Lagos-Ibadan Expressway to MRS and TOTAL stations at Ojota to Mobil and Oando stations at Maryland and Mobil and MRS stations at Kofo Abayomi in Victoria Island, all of them were selling to motorists at N145 per litre.
Efforts to speak with the Chairman of Major Oil Marketers Association of Nigeria (MOMAN), Tunji Oyebanji, probed abortive as calls made to his line were not answered and he is yet to reply the text message sent to his line.
A marketer who pleaded anonymity told Nigerian Tribune that most of his colleagues are selling old stock as at Thursday while he noted that some trucks also lifted products on Wednesday at N133 ex-depot price per litre.
He argued that some reconciliations need to be carried out to determine who bears the difference and by how much will each party be responsible for.
Source: Tribune Online