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Monday, 25 January 2016

FG removes kerosene subsidy, product to sell for N83 per litre

The Federal Government, weekend, finally removed subsidy on Kerosene.
With the development, the product would now sell for N83 per litre from N50 per litre.
The Petroleum Products Pricing Regulatory Agency, PPPRA, in its product pricing template released over the weekend, however, stated that the N83 per litre price applies only to the Nigerian National Petroleum Corporation (NNPC), meaning that other petrol stations and dealers can sell higher than the stipulated amount.

Vanguard reports that the PPPRA’s template also indicated that at N83 per litre, the Federal Government is making a gain of N10.72 for every litre, as it puts the Expected Open Market Price, which is the Landing Cost plus Total Margins at N72.28 per litre.

Giving a breakdown of the price, the PPPRA template put the Landing Cost of the product at N57.98 per litre, while the total margin due middlemen was put at N14.30.

Further breakdown of the Total Margins showed that retailers margin was put at N5per litre; Transporters – N3.05 per litre; Dealers – N1.95 per litre; Bridging fund – N5.85 per litre; Marine Transport Average – N0.15 and Admin Charges – N0.15.

The PPPRA further put official ex-depot price, which is the price depot owners would sell at marketers, at N68.70 per litre, official ex-depot price for collection – N73 per litre, while ex-coastal price – N68.02 per litre.

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