BEVERLY HILLS, May 03, (THEWILL) – The latest pricing template of the Petroleum Products Pricing Regulatory Agency, PPPRA, has indicated for every litre of petrol consumed by Nigerians, the federal government would now pay subsidy of N12.88 to the independent markets, while the Nigerian National Petroleum Corporation, NNPC, gets N12.62 for selling below the expected open market price.
The updated template, which was released in Abuja on Monday by the PPPRA shows that the gradual rise in subsidy paid to oil marketers for bringing products into Nigeria, was necessitated by the recent increase in crude oil price to about $47 a barrel.
This means that following the rise in crude oil price to about $47 a barrel, the federal government will resume the payment of subsidy on petrol as the product is now selling below the expected open market price. It will now be paying between N12.62 and N12.88 as subsidy for every litre of petrol consumed by Nigerians.
Data in the template, which is expected to cover the second quarter of 2016, has it that the expected open market price of petrol has risen to N99.38 per litre for independent and major oil marketers, and N98.62 per litre for retail outlets belonging to the state oil corporation – the NNPC.
The expected open market price is the actual price of the product taking into consideration all market elements, which include landing cost and distribution margins, without subsidy element.
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