News Obiaks News

   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.

Executive Secretary of the PPPRA, Mr. Farouk Ahmed, who made the announcement, said the reduction in the price of the commodity was due to an implementation of the revised components of the Petroleum Products Pricing Template for PMS and household kerosene.

According to him, the revised template, which would be reviewed on quarterly basis, is geared towards ensuring an efficient and market-driven price that would reflect current realities.

He said: "Since 2007, while crude oil price had been moving up and down, the template remained the same. This had made it necessary for us to introduce a mechanism whereby the template would be sensitive to the price of crude oil.

"However, the template is not static, as there would be a quarterly review and if there is any major shift, the Minister of State for Petroleum Resources would be expected to call for a review, either upward or downward, depending on the market condition."