Subsidy on Premium Motor Spirit, otherwise known as petrol, has increased to N12.27 per litre, the highest since the Federal Government reduced the pump price of the product to N87 per litre, data obtained from the Petroleum Products Pricing Regulatory Agency on Wednesday has shown.
The Federal Government had on Sunday, January 18, 2015 announced the reduction in the pump price of petrol by N10 from N97, attributing this to the decline in global crude oil prices.
The Expected Open Market Price of PMS, according to the PPPRA pricing template, is N99.27 per litre as of February 3, up from N95.47 on February 2 and N88.23 on January 29.
This means that N12.27 is the subsidy incurred by the government on every litre of the product from that day, with the regulated price of the product being N87 per litre. The subsidy was N8.47 per litre on February 2.
Nigeria, Africa’s top oil producer, relies on importation for most of its fuel needs as the country’s refineries are in a poor state.
The product cost and freight component was put at N73.46 per litre, up from N69.79 per litre on February 2 and N62.79 on January 29.
The landing cost, which is the sum of the product cost, freight rate, trader’s margin, lightering expenses, Nigerian Ports Authority fees, financing cost, jetty depot throughput charge, and storage charge, increased to N83.78 per litre, up from N79.98 on February 2 and N72.74 on January 29.
The EOMP (total cost) is the sum of the landing cost and the distribution margins, which amounted to N15.49 per litre.
On the distribution margins, the retailers’ cost element stood at N4.6; transporters, N2.99; dealers, N1.75; bridging funds, N1.75; marine transport average cost, N0.15; while admin charge was put at N0.15.