NNPC commits N10bn daily to keep petrol pump price low

Nigeria’s subsidy payment is now at N10 billion daily, as international oil price continues to surge.

On Friday, Brent, the oil benchmark for Nigeria’s oil, closed the week at $118.1; this is the highest level in the last nine years and should have been a piece of good news.

But, this development means Nigeria’s landing cost of petrol is now above N333 at an official rate of $416.46 and 1,341 litres per metric tonnes.

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The Nigeria National Petroleum Corporation (NNPC) claims Nigeria’s daily petrol consumption is at 60 million litres meaning to keep the price at 165 per liter, NNPC will be covering a cost of more than N168.

The N168 means Nigeria’s daily subsidy amounts to over N10 billion as the pump price of the product remains steady at N162-N165 per litre.

According to a document, the cost of petrol quoted on Platts stood at $918.75 per metric tonne (N285.33 per litre, using the I&E rate of N416.33/$1) as at February 25 2022 from $754.75 per MT on December 31, 2021.

Other costs include freight at $26.77 per MT (N8.31 per litre), lightering expenses (N4.81), Nigerian Ports Authority charge (N2.49).

Others are Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N2.17).

Wholesaler margin is at (N4.03), admin charge (N1.23), transporters allowance (N3.89), bridging fund (N7.51), marine transport average (N0.15), and retailer margin (N6.19).