The landing cost of Premium Motor Spirit (petrol) imported into the country has risen by 13.34 per cent in one month to about N180 per litre amid rising increase in crude oil price.
The global crude oil price affects the landing cost of petrol and pump price of the product due to the deregulation of the sector and removal of fuel subsidy by the Nigerian government last year.
Checks on Monday showed that Brent crude, the international benchmark of crude oil, increased above $60 per barrel as of 7:03 pm Nigerian time.
Analyses using the pricing template of the Petroleum Products Pricing Regulatory Agency showed that the landing cost of petrol rose to about N179.67 per litre last Friday from N158.53 per litre on January 7.
This increase in landing cost is expected to cause a rise in petrol pump price to N202.67 per litre from N181.53 per litre.
The rising price of crude oil pushed the cost of petrol quoted on Platts to $543.25 per metric tonne (N157.99 per litre, using N390/$1) last Friday from $480.25 per MT (N139.67 per litre) on January 7.
Other cost elements that make up the landing cost include freight (N8.74), lightering expenses (N4.57), insurance cost (N0.24), Nigerian Ports Authority charge (N2.38), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N1.33).
The freight cost also increased to $30.04 per MT (N8.74 per litre) last Friday from $20.47 per MT (N5.95 per litre) on January 7.
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The pump price is the sum of the landing cost, wholesale margin and the distribution margins. The wholesale margin is N4.03 while the distribution margins comprise transporters allowance (N3.89), retailer (N6.19), bridging fund (N7.51), marine transport average (N0.15), and admin charge (N1.23).
However, the PPPRA has not announced an upward review in the price of the product.
The Federal Government announced last week the commencement of discussions with representatives of the labour union on how to raise the freight rate from N7.51 per litre to N9.11 per litre.
Also, organised labour has not concluded discussions with the government on petrol pump price increase that was effected in November 2020.