Yemisi Izuora/Ijeoma Agudosi
Current subsidy on premium motor spirit (Petrol) after government adjusted its pump price from N97 per litre to N87 per litre has increased to N3.64 from the N2.84 stated on January 16, 2015.
Available statistics from the Petroleum Products Pricing Regulatory Agency now shows the new figure.
According to the latest petrol pricing template, the Expected Open Market Price (EOMP) of petrol, is N90.64 per litre as of January 23, up from N89.8 on January 16 which now means that N3.64 is the subsidy cost that the government is supposedly paying on every litre of the product as consumers are buying it at the regulated price of N87 per litre.
The landing cost was put at N75.15 per litre, up from N74.35 recorded on January 16. The agency, however, did not disclose what led to the increase in the landing cost.
The landing cost is the sum of the product cost, freight fees, trader’s margin, lightering expenses, Nigerian Ports Authority fees, financing cost, jetty depot thoughput charge, and storage charge. But none of these was stated in the new template.
The addition of the distribution margins to the landing cost gives the total cost (EOMP). The distribution margins, which comprise retailers, transporters and dealers’ profits, as well as bridging fund, marine transport average and admin charges, were also not stated.
It will be recalled that the Federal Government had on Sunday, January 18, 2015 announced the reduction in the pump price of petrol from N97 to N87 per litre, attributing this to the decline in global crude oil prices.