Petrol Subsidy Returns: Presidency retains official pump prices

The Federal Government has recommenced the payment of subsidy on petrol as it subsidised the commodity by N5.84 for every litre of premium motor spirit consumed in Nigeria.

It also announced that the current official pump prices of petrol would remain at N86 per litre when purchased at filling stations run by the Nigerian National Petroleum Corporation and N86.5 per litre when sold at outlets operated by other oil marketers.

Subsidy on petrol was stopped in January after the review of the pricing template by the government.

The government further said the lingering petrol scarcity would end within few days.

Figures from the pricing templates of the PPPRA released on Saturday, showed that the Federal Government was paying N5.84 as subsidy on every litre of petrol sold at non-NNPC filling stations.

The PPPRA is the agency of the Federal Government that regulates the prices of white products — petrol and kerosene, across the country.

According to the agency, the Expected Open Market Price of petrol for non-NNPC stations as at April 2, 2016, was N92.34 per litre, against an official pump price of N86.5 per litre, leaving an under-recovery or subsidy of N5.84 per litre.

Similarly, the template for NNPC-run stations showed that the government was paying N5.80 per litre as subsidy, as the EOMP for outlets in this category was N91.80 per litre as against an official rate of N86 per litre.

The EOMP is the actual cost of petrol without subsidy and comprises of the landing cost of the product as well as its subtotal margins like transporters charge, admin fee, dealers cost, bridging fund, etc.

On the retained pump price of petrol, the Acting Executive Secretary, PPPRA, Mrs. Sotonye Iyoyo, said, “The agency is retaining the retail prices of N86.00 for the NNPC, and N86.50 for the other marketing companies. The pump price of household kerosene also remains unchanged from what it was in the last quarter.

“Therefore, marketers are advised to ensure that there is no price distortion in their respective retail outlets. PPPRA, however, shall continue to monitor the global oil market performances, and come up, at appropriate time, with reasonable changes consistent with the newly-adopted price modulation principles.”