By Odunewu Segun
The federal government has finally approved a new pump price for petrol in Nigeria starting from January 1st to March 31st, 2016 under a revised pricing template.
According to the Petroleum Products Pricing Regulatory Agency, the government approved two pump prices – one for the retail outlets of the Nigerian National Petroleum Corporation (NNPC), which will sell at N86 a litre, and another for retail outlets operated by private business concerns in the downstream petroleum sector, which will dispense at N86.50 a litre.
The Executive Secretary of the PPPRA, Farouk Ahmed, said both open market prices reflect a drop of N1 and 50k respectively from the current official price of N87 per litre, which will no longer obtain after December 31.
According to Ahmed, the cost elements that were affected by the review of its pricing template for petrol included the traders’ margin which was revised downwards from N1.47 per litre to zero; lightering expenses, from N4.07/litre to N2.00/litre; charges by the Nigerian Ports Authority (NPA), from N0.77/litre to N0.36/litre; jetty throughput charges, from N0.80/litre to N0.40/litre; storage charge, from N3.00/litre to N1.50/litre; bridging fund, from N5.85/litre to N4.00/litre; and ex-depot price, from N77.66/litre to N77.00/litre.
He stated that other elements such as the retailers’ margin were however revised upwards from N4.60/litre to N5.00/litre; transporters’ margin, from N2.99/litre to N3.05/litre; and dealers’ margin, from N1.75/litre to N1.95/litre.
“Accordingly, the ex-depot price of petrol shall be N77.00k per litre, while the pump price shall be N86.50k per litre in line with the prevailing market trend.
“The key thing here is that with the revision, the open market price has come down slightly. The new pump price for private marketers is N86.50k, down from N87 per litre, effective January 1, 2016.
“However, for NNPC imports, because an element of the template which is the financing cost is not captured in the NNPC template, its imports are slightly lower, so NNPC’s price will be N86 per litre, meaning that if you go to NNPC retail stations, you should buy at N86 per litre and N86.50k in other stations,” Ahmed explained.
He said the measure was to guarantee uninterrupted fuel supply nationwide. “Marketers are required to note that there shall be a mid-quarter review of performance where volumes of non-performing marketers including the NNPC shall be withdrawn and reallocated to performing marketers,” Ahmed explained.