Barely 24 hours after the Federal Government announced the removal of subsidy on petrol – sending the price of the commodity spiralling to an all-time high level of N141 per litre from N65 –  petroleum products marketers nationwide  have adjusted their retail pumps to reflect the new price regime nationwide.

Visits to some of the retail outlets in Abuja and environs today showed that a litre  of petrol now cost N138 at filling stations belonging to the Nigerian National Petroleum Corporation (NNPC) and N141 at Oando PLC outlets in line with the price ceiling published by the Petroleum Products Pricing Regulatory Agency (PPPRA).

In what appears a reflection of the country’s quest to fully deregulate  the downstream sector, marketers have adjusted their pumps to reflect different prices. African Petroleum sells a litre of petrol for N139.80k;  Conoil, and  Mobil, N140; while Total dispenses the product for N140.50k per litre at its service stations. 

The PMS spot market price template for January 1 and 14, 2012 published by the PPPRA in its website puts maximum benchmark ex-depot price at N131.66k per litre, while the benchmark open market price (OMP) is put at N141 per litre, subject to review every two weeks to accommodate price movements at the international oil market.

Our checks revealed that should the volatility in the international oil market push  the price above the N141 ceiling level, government would have to intervene. A top official of the PPPRA, who pleaded anonymity, was however  cautious on what the mode of intervention would be, given that government would not want to be involved in any form of subsidy again. 
A review of the products pricing template on petrol for Thursday, December 29, 2011 shows how the PPPRA arrived at the N141 per litre ceiling retail price of premium motor spirit (PMS), otherwise called petrol, which it says marketers must not exceed.

According to the PPPRA, with a metric ton of imported PMS, including cost of products and freighting, arriving the country’s shores at about $951.68, and a conversion rate of about 1,341 litres per ton (based on an exchange rate of N159.76 to the dollar),  the landing cost of a litre of petrol at the country’s ports will translate to about N113.38k.

The pricing agency further claimed that when other charges are added, including trader’s margin ($10) per ton, or N1.19 per litre; lightering expenses ($33.17) per ton, or N3.95k per litre; Nigerian Ports Authority (NPA) charges ($5.25k) per ton, or 63K per litre; financing cost ($21.52) per ton, or N2.56k per litre; Jetty/depot thru’ put charge ($6.72) per ton, or 80k per litre, and storage facility charge ($25.18), or N3 per litre; bridging fund ($49.10), or N5.85k per litre; marine transport average (MTA) ($1.26) per ton, or 15k per litre as well as administration charge ($1.26) per ton, or 15k per litre, minimum benchmark price of a ton of petrol would come to $1,105.14, or N131.66k per litre.

When the distribution margins of $78.40 per ton, or N9.34 per litre, consisting retailers’ margin ($38.61) per ton, or N4.60k per litre; transporters margins ($25.10) per ton, or N2.99 per litre, and dealers margins ($14.69) per ton, or N1.75k per litre, the maximum benchmark open market price would purportedly come to about $1,183.54 per ton, or N141 per litre.

As expected, the new prices have started taking their toll  on commuters, as transport fares in the Federal Capital Territory (FCT) and environs have jumped by over 100 percent.

Drops by taxi, which used to cost an average of N250 – N300, now attract  charges between N500 and N600, while a bus ride from the city centre to the outskirts of the town, including Kubwa, Nyanya, Lugbe, AYA, Mararaba and Gwarimpa, which used to go for about N100-N150, now cost  N200.

A distraught resident, who travelled to the eastern part of the country for the yuletide celebrations, wrote on his 
Facebook page: “We are in serious trouble with this subsidy removal. Transport fare from Enugu to Lagos by bus is now N17,000; Port Harcourt to 
Maiduguri (N22,000); Jos to Lagos (N19,000). Some people can’t even come back from the village. I want to go back to Owerri and finish up my clearance, the fare by bus is N23,000 from Jos. I am so scared my mom can’t put up with this. My dad has been very ill since 2006, and mom has been the one fending for me and my siblings. Now, Jonathan has sent us back to square one.”