Nigerians depending on the Household Kerosine (HHK) for domestic use will now have to stump up at least N83 for a litre, up from N50, as the federal government ended the subsidy regime on kerosene weekend.
The new price is, however, limited to the NNPC stations, according to the Petroleum Products Pricing Regulatory Agency (PPPRA). Other fueling stations could sell at higher rates.
With the pricing, the PPPRA says the federal government is making a gain of N10.72 for every litre, considering that the Expected Open Market Price, which is the Landing Cost added to the Total Margins, will stand at N72.28 per litre.
The agency puts the Landing Cost of HHK at N57.98 per litre, while the total margin due for middlemen was put at N14.30. The retailers margin stands at N5 per litre; transporters, N3.05 per litre; dealers, N1.95 per litre; bridging fund, N5.85 per litre; marine transport average, N0.15; and administrative charges, N0.15.
The PPPRA further puts official ex-depot price, which is the price depot owners would sell to marketers, at N68.70 per litre, official ex-depot price for collection, N73 per litre, while ex-coastal price is N68.02 per litre.
The new template is not cast in stone, however. The executive secretary of the PPPRA, 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.
“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,” he said.
“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.”
The federal government yanked off the subsidy on the Premium Motor Spirit (petrol) late December, pegging the product price at N86 per litre by the NNPC retail stations, while other oil marketers would sell at N86.50 per litre.