Chineme Okafor in Abuja
The federal government is now paying between N12.88 and N12.62 as subsidy for every litre of petrol consumed by Nigerians, the updated pricing template of the Petroleum Products Pricing Regulatory Agency (PPPRA) has shown.
The template which was released Monday in Abuja indicates that this gradual rise in subsidy paid to oil marketers for bringing products into Nigeria was necessitated by the recent rise in crude oil price to about $47 a barrel.
This means that for every litre of petrol consumed by Nigerians, the federal government would pay a subsidy of N12.88 to the independent markets while the Nigerian National Petroleum Corporation (NNPC) gets N12.62 for selling below the expected open market price.
According to the updated PPPRA template which is expected to cover the second quarter of 2016, the expected open market price of petrol has risen to N99.38 per litre for independent and major oil marketers and N98.62 per litre for retail outlets belonging to the Nigerian National Petroleum Corporation (NNPC).
The expected open market price is the actual price of the product taking into consideration all market elements, which includes landing cost and distribution margins, without subsidy element.
However, a source within the PPPRA explained that the pump price of fuel remains N86.50 for major and independent marketers and N86 for NNPC retail outlets adding that the difference would be taken care of through subsidy payment.
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