Daily subsidy on petrol now N678.8m

By Oluwagbenga Bankole

The subsidy on Premium Motor Spirit (PMS) popularly known as petrol is now N678, 800,000 for daily consumption of the product within the country.

According to the latest figure from the Petroleum Products Pricing Regulatory Agency (PPPRA), the Federal Government is paying N 16.97 as subsidy for every litre of petrol consumed in Nigeria.

The PPPRA pricing template released on September 24, 2015, revealed that the Expected Open Market Price (EOMP) or total cost for petrol was N 103.97per litre.

This was against a retail regulated price of N87 per litre. The difference between the EOMP and the retail price is therefore N16.97.

According to the Nigerian National Petroleum Corporation (NNPC), Nigeria consumes about 40 million litres of the PMS daily.

The cost elements that make up the landing cost include the product’s offshore cost, N 77.52; trade margin, N 1.47; lightering expenses, N 4.10; NPA, N0.77; financing, N 0.81; jetty depot throughput charge, N0.80; and storage charge, N3.

According to the agency, the cost of the product’s distribution margin, retailers get N4.60; transporters, N2.99; dealers, N1.75; bridging cost is N5.85; marine transport average, N0.15; and the admin charge, 

N0.15. The sub-total margin stands at N 15.49.

When added to the landing cost of N88.48, an EOMP of N 103.97per per litre is arrived at. But this is subsidised and a flat official rate of N87 per litre is given.

Over the years there have been controversy surrounding the exact amount government pays to marketers as subsidy.

Just recently, the audit report by PricewaterHouse Coopers (PWC) on the financial management of the Nigerian National Petroleum Corporation (NNPC) revealed that there were many cases of duplicated subsidy payment by the NNPC to many oil marketers between 2012 and 2013.

According to the report, payment of subsidies for petrol (PMS) and kerosene (DPK) between January 2012 and July 2013 when investigated had a difference of $980 million (about N195 billion) due to duplicated payments.