FG to pay subsidy on petrol from savings
The Federal Government will pay subsidy on Premium Motor Spirit (petrol) from the over recoveries made in the first quarter of this year, as this is contained in the latest pricing template released by the Petroleum Products Pricing Regulatory Agency in Abuja, according to a report by the News Agency of Nigeria on Monday.
According to Punchng, The template indicated that between January and March, the Federal Government was able to save about N10bn as a result of selling the product above the expected open market price.
According to the new template, the expected open market price of the PMS has risen to N99.38 per litre for independent and major oil marketers, and N98.62 per litre for the Nigerian National Petroleum Corporation’s retail outlets.
The expected open market price is the actual price of the product without subsidy and it is based on the current exchange rate of N197 to a dollar.
The PPPRA stated that at the current price of N86 per litre at the NNPC retail outlets, the Federal Government was incurring N12.62 per litre as subsidy on the product, and N12.88 per litre as subsidy for other oil marketers, whose pump price is N86.50.
A breakdown of the template revealed that for the NNPC retail outlets and independent and major oil marketers, the landing cost of the PMS imported into the country was N84.32 and N85.08 per litre, respectively.
The distribution margin, which includes retailers margin, transportation, bridging fund and dealers margin, stands at N14.30 for both the NNPC and other marketers.
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