BREAKING: Fuel Price Rises Under Buhari’s Watch, As Subsidy Hits N27.81 Per Litre

By Post-Nigeria: November 26, 2019 20:27

BREAKING: Fuel Price Rises Under Buhari’s Watch, As Subsidy Hits N27.81 Per Litre

The amount the Federal Government, through the Nigerian National Petroleum Corporation, NNPC, is paying for subsidy on Premium Motor Spirit, PMS, also known as petrol, has risen to N27.81 per litre, according to the data released by the Petroleum Products Pricing Regulatory Agency, PPPRA.
Using current fuel supply statistics of 55 million litres per day, it means that the Federal Government is paying N1.53 billion per day as subsidy on PMS.
The PPPRA, in its latest PMS Product Pricing Template for November 25, 2019, disclosed that the rise in fuel subsidy was as a result of a 5.58 percent increase in the market price of PMS, to N172.81 per litre, as at the reference period, compared to N163.68 per litre recorded on November 15, 2019, when subsidy stood at N18.68 per litre.
However, the amount paid as subsidy on PMS, had on November 21, 2019, risen to N33.92 per litre, when the Expected Open Market Price of PMS stood at N178.92 per litre.

Giving a breakdown of the cost components of PMS imported by the NNPC as at November 25, 2019, the PPPRA report stated that the cost of the commodity plus freight rose to $628.83 per metric tonne, an equivalent of N143.94 per litre, compared to $618.47 per metric tonne, an equivalent of N141.54 per litre recorded on November 15.
In addition, the report added that lightering expenses and Nigerian Port Authority, NPA, charges stood at N2.75 per litre and N0.84 per litre, respectively.
The Nigerian Maritime Administration and Safety Agency, NIMASA, charges, according to the downstream regulatory Agency, stood at N0.22 per litre, Jetty Throughput charge N0.60 per litre, storage charge N2.00 per litre, and financing N3.09 per litre.
The PPPRA report put the landing cost of the commodity at N153.44 per litre, while total distribution margins of N19.37 per litre brings the total cost of the commodity to N172.81 per litre.

As at November 15, 2019, the landing cost of the commodity stood at N147.95 per litre, while the total distribution margins of N19.37 per litre brings the total cost of the commodity to N163.68 per litre.
On the other hand, as at November 21, 2019, the report put cost plus freight of the commodity at $655.02 per metric tonne, an equivalent of N149.93 per litre, landing cost stood at N159.55 per litre, while Expected Open Market Price of the commodity stood at N178.92 per litre.
The Federal Government has set a retail price band of N135 and N145 per litre, meaning that no petrol station is allowed to sell the commodity above this price range.

However, the NNPC is currently the sole importer of PMS into the country, meaning that subsidy payment is deducted by the NNPC, directly from its domestic crude oil and gas sales, before making remittances to the Federation Account.
The subsidy figure is expected to rise, as data obtained from the National Bureau of Statistics, NBS, revealed that N836.67 billion was spent on the importation of PMS and other petroleum products, in the second quarter of 2019.
The NBS, in its Foreign Trade in Goods Statistics for the Second Quarter of 2019, stated that the amount spent on the importation of PMS and other petroleum products, rose sharply by 193.98 percent, from N284.599 billion spent on the importation of the product in the first quarter of 2019.