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Sunday, 3 April 2016

Nigeria FG returns petrol subsidy as official pump prices is retained


The Federal Government on Saturday 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.
Subsidy on petrol was stopped in January after the review of the pricing template of the product by the government.
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.
The government further said petrol scarcity would end in a few days, but was silent on the specific day or date.
Figures from the latest pricing templates of the Petroleum Products Pricing Regulatory Agency 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.”
On news making the rounds that the agency was planning to increase the petrol price, Iyoyo urged members of the public to ignore such rumour, as prevailing market indicators do not support such.
She also called on motorists to desist from panic-buying, stressing that “PPPRA was working hard with other sister-organisations to ensure that the current supply and distribution challenges were resolved within the coming days.”
Meanwhile, the agency stated that it had released the second quarter allocations for the supply of petrol, based on the approval of the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu.

It said, “In the latest release, the apex national oil company, the NNPC, has 41.74 per cent of the total allocation, while the rest of the oil marketing companies got a total allocation of 58.27 per cent.”

 - Punch
http://www.punchng.com/fg-returns-petrol-subsidy-retains-official-pump-prices/

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