How Nigerian Government Arrived At New N125 per litre Petrol Price – Official

How Nigerian Government Arrived At New N125 per litre Petrol Price – Official

The computation of the new retail pump price of premium motor spirit (PMS), popularly called petrol, announced by the federal government on Wednesday was based on the pricing modulating template approved by the Petroleum Products Pricing Regulatory Agency (PPPRA), an official has said.

On Wednesday, the federal government announced a 13.8 per cent, or N20 reduction in the retail pump price of petrol throughout the country.

A statement signed personally by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, said the new petrol price will be N125 per litre, down from N145.

PPPRA new price template

Details of the review by the PPPRA showed the slowing global crude oil demand, which pushed crude oil price down to $25 per barrel on Wednesday, resulted in a 30 per cent drop in the expected open market price (EOMP) of petrol below the approved retail pump price cap of N145 per litre.

The Executive Secretary of PPPRA, Abdulkadir Saidu, said the average EOMP for the months of January and February 2020 stood at about N175.52 per litre and N156.02 per litre respectively.

This translates into a subsidy component of about N30.52 and N11.02 per litre the government was saddled with through the NNPC for the two months.

The new price, the PPPRA boss said, was based on the PMS price cap of N145 per litre approved 2016, and taking into account the approved distribution margins on the pricing template, with NNPC as the sole importer of PMS.

With Ex-Coastal price (consisting cost and freight charges) set at N99.44 per litre, the new EOMP will be about N118.81.

This consists landing cost of N108.18; lightening expenses N2.75; Nigerian Ports Authority (NPA) – N0.84, and the Nigerian Maritime Administration and Safety Agency (NIMASA) charge (N0.22); jetty thru’ put charge (N0.60); Storage charge (N2.00); financing (N2.33) and total distribution margin payable to petroleum product marketers at N19.37 per litre.

In announcing the new petrol price of N125 per litre, the PPPRA boss said the review was pursuant to the agency’s statutory mandate to determine the pricing policy of petroleum products as enshrined in the PPPRA Act No.8 of May 2003.