Savings From Fuel Subsidy Removal Soars to N647million Daily

Federal government is saving N647.2 million daily from the suspension of subsidy on Premium Motor Spirit, also known as petrol.

At the current price of N86.50 per litre in petrol stations, the country is making an extra N16.18 per litre.

The saving is partly due to the continuous decline in the price of crude oil in the international market, which dragged the open market price of petrol to N70.32 per litre.

The amount the country is saving is based on a 40 million litres average daily consumption of PMS by Nigerians as declared by the Federal Government.

Since the announcement and commencement of the price modulation regime by the Federal Government, the open market of PMS had fluctuated between N4 and N12 per litre before rising to its current level.

Data obtained, on Wednesday, February 10, from the Petroleum Products Pricing Regulatory Agency, PPPRA, in its pricing template for PMS for February 9, 2016, revealed that at a retail price of N86.50 per litre, as approved by the Federal Government, the country is saving N16.18 per litre of the product.

The PPPRA put the landing cost of the product at N56.02 per litre, composed of Cost plus Freight — N51.19 per litre; Lightering Expenses — N2.02; NPA Financing — N0.15, Jetty Throughput Charge — N0.60 and Storage Charge — N2.00 per litre.

In addition, total margins stood at N14.30 per litre, composed of Retailers, Transporters and Dealers margins of N5, N3.05 and N1.95 per litre respectively, while Bridging Fund, Marine Transport Average and Admin Charge stood at N4, N0.15, and N0.15 per litre respectively. The PPPRA put the total cost of the product, which is the expected open market price, at N70.32 per litre and the ex-depot price, which is the price at which petrol stations owners buy from depot, at N76.50 per litre.

Read more at: http://www.vanguardngr.com/2016/02/savings-from-fuel-subsidy-removal-rise-to-n647m-daily/