FG to fund petrol subsidy from oil savings
The federal government says it would pay subsidy on premium motor spirit from the recoveries made in the first quarter of 2016.
The Petroleum Product Pricing Regulatory Agency (PPPRA) disclosed this in its latest template, which was released in Abuja on Monday.
It said between January and March, the federal government was able to save about N10 billion as a result of selling the product above the expected open market price.
According to the new template, the expected open market price of the premium motor spirit (PMS) has risen to N99.38 per litre for independent and major oil marketers, and N98.62 per litre for NNPC retail outlets.
It added that the expected open market price is the actual price of the product without subsidy and it is based on the current exchange rate of N197 to a dollar.
It said that at the current price of N86 per litre at NNPC retail outlets, the federal government is paying N12.62 per litre as subsidy on the product and N12.88 per litre as subsidy for other oil marketers’ price of N86.50.
A breakdown of the template revealed that for NNPC retail outlets and independent and major oil marketers, the landing cost of PMS imported into the country is N84.32 and N85.08 per litre respectively.
It stated that the distribution margin, which include retailers, transportation, bridging fund and dealers margin among others stands at N14.30 for both the NNPC and other marketers.
The current expected open market price is N98.62 and N99.38 for NNPC retail outlets and other marketers respectively, according to the statement.
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