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Positives from Oil Price Slumps as Subsidy Payments Falls to N14 Per Lit

Data from the website of the Petroleum Products Pricing Regulatory Agency has shown that subsidy on every litre of Premium Motor Spirit consumed in the country has dropped to N14.39, N51.61 per litre on June 11, 2015.

The fall in the subsidy payable by the Federal Government is partly due to the sustained decline in global crude oil prices, which have continued to trade below the $50 per barrel mark in recent weeks.

The PPPRA, in its latest pricing template released on Friday, October 2, 2015, stated that the landing cost and Expected Open Market Price (total cost) of petrol were N85.90 and N101.39 per litre, respectively.

This is against a regulated retail price of N87 per litre. The difference between the EOMP and the retail price is, therefore, N14.39.

According to the Nigerian National Petroleum Corporation, the country consumes about 40 million litres of petrol daily which, when multiplied with the current amount spent as subsidy on the product, comes to about N575.6m on subsidy, down from N2.06bn in June 11.

Nigeria, Africa’s top oil producer, relies on importation for most of its fuel needs as the country’s refineries are in a poor state.

 

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