The absence of the usual subsidy component in the latest Petroleum Products Pricing template from the Petroleum Products Pricing Regulatory Agency, PPPRA, has indicated the federal government’s decision to officially stopped paying subsidy on the premium motor spirit, PMS, better known as petrol.
The official pricing template for petrol by the PPPRA as of December 28, 2015 saw the Federal Government subsidising the product by N6.45 per litre when the Estimated Open Market Price, EOMP, at that time was N93.45. This was N6.45 higher than the then retail price of N87 per litre.
The EOMP is the summation of the landing cost of petrol and subtotal margins which include transporter’s cost, dealer’s charge, bridging fund, administrative charge, etc. This, to experts, makes EOMP the true cost of the product.
On the revised template, the EOMP set by the government agency that regulates the prices of petroleum products in the country is now N84.78 for NNPC fuel stations and N85.1 for stations run by other oil marketer companies.
Prior to the release of the revised template, the EOMP was usually higher than the retail/pump price of petrol at filling stations, with the federal government paying the difference between the retail price and the EOMP as subsidy to oil marketers.
With the new EOMP being lower than the retail price of N86.5 set by the Federal Government as what petrol should be sold nationwide, this means that Nigerians are paying an extra N1.4 for the commodity whenever they buy PMS at non-NNPC run petrol stations and N1.22 extra for every litre of petrol bought at NNPC-run filling stations.
Last Tuesday, the PPPRA had, after getting approval from the Federal Government, announced that retail fuel stations belonging to the NNPC would from Friday, January 1, 2016 sell petrol at N86 per litre, while other oil marketers would sell the commodity at N86.5 per litre.