The Nigerian National Petroleum Corporation (NNPC) and Petroleum Product Pricing Regulatory Agency (PPPRA) have on Friday, December 18, declared that they had begun work on a new cost-reflective pricing template for domestic petrol sales and consumption and that the template would be out by the first quarter of 2016.
This came on the heels of recent disclosure by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu that government would work out a template with the Petroleum Product Pricing Regulatory Agency (PPPRA), which might make petrol commodity sell for less than N87 per litre next year.
After a meeting in Abuja, the Group General Manager, Corporate Planning and Strategy of NNPC, Bello Rabiu disclosed to journalists that the PPPRA would release the new pricing template before the end of Q1 2016.
Rabiu, said the cost of bringing one litre of petrol to the country currently was N65.
“The logistics for bringing it to the depot and to the filling stations,” he said, “is about N10.55. The distribution cost is N15.49 while the open market as at today is N91.52/litre.”
“Now, if you take away N87, which is regulated price, it means that subsidy is basically N4.85. If we are consuming 41 million litres, it means we are subsidizing N200 million a day.”
“If we can look at this one that is N91.52 and we pray we can get about N15 off there, that will bring it down to a little more or less than N80. If we take off N10.50, we come down to N81. If we take it down to N7.52, we come down to N85.
“So you can see that the price we have today, if we look at the template can come down, and many Nigerians will believe that there is no subsidy.”