The
Federal Government on Monday said it was currently subsidising Premium
Motor Spirit (PMS) otherwise known as petrol at N12.62 per litre.
It said that the subsidy figure was for
petrol imported directly by the Nigerian National Petroleum Corporation
(NNPC) and dispensed at its retail outlets, while the rate was N12.88
per litre for other oil marketers.
This is contained in the latest
Petroleum Product Pricing Regulatory Agency (PPPRA) Template released in
Abuja. It said that although provision was not made for subsidy in the
2016 budget, it would be defrayed from “recoveries” made by the country
from oil transactions in the first quarter of 2016.
According to the agency, between January
and March, 2016, the Federal Government was able to save about N10
billion as a result of selling the product above the Expected Open
Market Price.
It explained that without the subsidy
and given the landing cost of the product, it ought to be sold at N98.62
per litre at NNPC outlets and at N99.38 per litre by major and
independent oil marketers.
According to the template, the expected
open market price is the actual price of the product without subsidy and
it was based on the current exchange rate of N197 to a dollar.
A breakdown of the template revealed
that for NNPC retail outlets and independent and major oil marketers,
landing cost of PMS imported into the country was N84.32 and N85.08 per
litre, respectively.
It stated that the distribution margin,
which included retailers, transportation, bridging fund and dealers
margin stood at N14.30 for both NNPC and other marketers.
“This brings the current Expected Open
Market Price to N98.62 and N99.38 for NNPC retail outlets and other
marketers respectively,” it said.
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