Nigeria: Govt ends subsidy on kerosene, price now N83/l

*Kerosene queue.

*Kerosene queue at a petrol station.

Oscarline Onwuemenyi

25 January 2016, Sweetcrude, Abuja –
The Federal Government has officially ended the payment of subsidy on kerosene. Instead of the regulated pump price of N50 per litre, the product will now sell for N83, according to the latest pricing template for Household Kerosene released by the Petroleum Products Pricing Regulatory Agency.

The PPPRA is the agency of the Federal Government that fixes and regulates the prices of white products, including kerosene and petrol, across the country.

In its latest template released on Sunday, the agency stated that the retail price of kerosene or HHK by the Nigerian National Petroleum Corporation was N83 per litre.

It stated that the N83 per litre price applied only to the Nigerian National Petroleum Corporation, NNPC, outlets.

The template also showed that at N83, the Federal Government will be making a gain of N10.72 on every litre.

It further puts the expected open market price, which is the landing cost plus total margins at N72.28 per litre.

The expected open market price is the prevailing open market rate for the product in Nigeria, after taking certain costs into consideration.

Giving a breakdown of the price, the PPPRA template put the landing cost of ‎the product at N57.98 per litre, while the total margin due‎ middlemen was put at N14.30.

The retailers’ margin was put at N5 per litre; transporters at N3.05 per litre while dealers at N1.95 per litre.

It further put the bridging fund at N5.85 per litre; marine transport average at N0.15 and Administrative Charges – N0.15.
It stated that the official ex-depot price, which depot owners would sell to marketers, is N68.70 per litre.

The official ex-depot price for collection is N73 per litre, while ex-coastal price is N68.02 per litre. The commodity is believed to be mostly consumed by low income earners in the country.

The new template showed that the retail or pump price of HHK was now N10.72 higher than the Expected Open Market Price of the commodity. The EOMP, according to the new template, is N72.28.

The EOMP is a summation of the landing cost of the commodity with the subtotal margins like bridging fund, transporters’ cost, dealers charge, admin charge, etc.

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