The Petroleum Products Pricing Regulatory Agency (PPPRA) has published a new pricing template for premium motor spirit (PMS) to give effect to the new regulated petrol price of N97 per litre announced by President Goodluck Jonathan on Monday.
By the new template, government claims it will pay out approximately N46 in subsidy for every litre of petrol consumed in the country
The new template published late yesterday on its official website invalidates the previous one released on January 1, 2012, following the announcement of the controversial removal of subsidy on petrol, which raised the price of a litre of the product by over 117 per cent from N65 to N141.
The resultant protests spearheaded by the organized Labour virtually grounded the country’s economy for nearly a week, forcing the government to capitulate, adjusting the price downwards by 58.89 per cent.
Components of the new pricing template, based on international oil market data of Friday, January 13, 2012, puts landing cost of a litre of petrol at N130.63; ex-depot price of N87.66 and a regulated price fixed at N97 per litre.
Curiously, template for January 1-14, 2012 earlier published in the wake of the subsidy removal on New year’s day, which had N131.66k as landing cost of a litre of petrol and N141 as deregulated price per litre, was removed from the agency’s website yesterday.
Comparative analysis of the cost elements in the new template showed the cost of product and freighting of a litre of imported PMS to the country’s shores at about N118.31, as against about N113.38 reflected in the PMS spot market price template for January 1 and 14, 2012, lightering expenses of N3.97, as against N3.95 previously and financing cost of N2.73, as against N2.56 previously. The N1.19 cost included in the previous template for trader’s margin was missing in the new document.
The Nigerian Ports Authority (NPA), Jetty/depot thru’ put and storage charges remained unchanged at $5.25k, N0.80 and N3 respectively.
Bridging fund charge of N5.85 and marine transport average (MTA) charge of N0.15 as well as administration charge of N0.15 per litre, which were components of the total benchmark depot price of N131.66 per litre have been moved under distribution margins in the new template.
A breakdown of the distribution margins shows that fuel retailers’ still take a margin of N4.60 per litre; transporter, N2.99 and dealers N1.75, to complete a total cost of N146.12, and official ex-depot price of N81.51 per litre, while ex-depot price(for collection) is put at N87.66. About N49.12 is included in the template as the total recoverable subsidy as a result of the current fixed pump price of N97 per litre.
PPPRA Executive Secretary, Reginald Stanley, urged suppliers to honour their fourth quarter 2011 supply obligations, as the agency has put in place appropriate machinery to ensure that products supplied under the regulated price of N97 per litre are fully accounted for and appropriate subsidy worked out for such deliveries.