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Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily - Politics - Nairaland

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Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by iwaeda: 10:06am On Jun 28
April landing cost, N216, devaluation, rising crude price fueling price increase
The landing cost of Premium Motor Spirit being imported into Nigeria surged by more than 60 per cent between December 2020 and mid-June this year, although the pump price of the product remained unchanged, ’FEMI ASU reports

From an average of N143.60 per litre in December, the landing cost of petrol rose to N231.98 per litre on June 16 this year on the back of the rally in global oil prices and the depreciation of the naira against the dollar.

The Petroleum Products Pricing Regulatory Agency had in March this year released a pricing template that indicated the guiding prices for the month.

The template, which showed that petrol pump price was expected to range from N209.61 to N212.61 per litre, was greeted with widespread public outcry and was later deleted by the agency from its website.

The pump price of petrol has remained at between N162 and N165 per litre at many filling stations in Lagos since December.


The template, which was based on an average oil price of $62.22 per barrel for February and an exchange rate of N403.80 to a dollar, showed that the landing cost of petrol was N189.61 per litre.

Last month, the Central Bank of Nigeria devalued the naira as it adopted the NAFEX exchange rate of N410.25 per dollar as its official exchange rate, days after removing the N379/$ rate from its website.

The price of crude oil, which accounts for a large chunk of the final cost of petrol, has continued to rise in recent months, with Brent, the international oil benchmark, closing at a record high of $76.18 per barrel last Friday, up from $73.88 per litre on June 16.

The Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari, said on March 25 that with the current market situation, the actual price of petrol could have been anywhere between N211 and N234 per litre.

He said the Federal Government was subsidising petrol with about N100bn to N120bn monthly (N3.3bn-N4bn daily) as it was being sold for N162 per litre.

The PUNCH had in an April 20, 2021 report estimated that the subsidy on petrol would gulp N500bn in the first five months of this year as the Federal Government decided to leave the pump price of petrol unchanged in the period despite the increase in global oil prices.

Based on the PPPRA template and Platts data, the expected pump price of the product stood at N254.90 per litre as of June 16, up from N239.31 per litre on April 16.

The expected retail price of N254.90 per litre and the current pump price of N162 per litre indicate a subsidy of N92.98 per litre as of June 16, compared to N77.31 per litre on April 16.


With daily petrol consumption put at about 60 million litres by the NNPC and a subsidy of N92.98 per litre, daily subsidy increased to N5.58bn on June 16 from N4.64bn on April 16.


The rising price of crude oil pushed the cost of petrol quoted on Platts to $691.25 per metric tonne (N211.47 per litre) on June 16 from $642.25 (N193.39 per litre) on April 16.

The PPPRA, in its March template, used an average cost of $561.96 per MT (N169.22 per litre) and an average freight rate of $21.63 per MT (N6.62 per litre).

Other cost elements that make up the landing cost include lightering expenses (N4.81), Nigerian Ports Authority charge (N2.49), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N2.17).


The pump price is the sum of the landing cost, wholesaler margin (N4.03), admin charge (N1.23), transporters allowance (N3.89), bridging fund (N7.51), marine transport average (N0.15), and retailer margin (N6.19).

The NNPC, which has been the sole importer of petrol into the country in recent years, is still being relied upon by marketers for the supply of the product despite the deregulation of the downstream petroleum sector.


This month, the International Monetary Fund expressed concern over the resurfacing of fuel subsidies in Nigeria, describing it as ‘concerning, particularly in the context of low revenue mobilisation’.

The Federal Government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 following the sharp drop in crude oil prices.

“The recent introduction and implementation of an automatic fuel price formula will ensure fuel subsidies, which we have eliminated, do not reemerge,” the Nigerian government had told the IMF in the letter of intent dated April 21, 2020 with respect to its request for emergency financial assistance of $3.4bn.

In February this year, the IMF said in a report after its Article IV consultation with Nigeria that the Nigerian authorities expressed strong commitment to prevent fuel subsidies from resurfacing and to fully eliminate electricity tariff shortfalls by mid-2021.

But petrol subsidy re-emerged earlier this year as the government did not allow the pump price of the product to reflect the significant rise in oil prices.

“The mission expressed its concern with the resurgence of fuel subsidies. It reiterated the importance of introducing market-based fuel pricing mechanism and the need to deploy well-targeted social support to cushion any impact on the poor,” the IMF said on June 17.

Deregulate price to curb smuggling of product – IPMAN

The National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, in an interview with our correspondent, noted that the Group Managing Director of NNPC, Mallam Mele Kyari, had said last week that the pump price of petrol should be about N256 per litre.

He said the subsidy being spent on the product had increased significantly, saying, “The best thing is for the government to deregulate the price of petrol to curb the smuggling of the product outside Nigeria to neighbouring countries.


“As long as the price of crude oil continues to rise and the pump prices of petrol remain the same in Nigeria, subsidy will increase and petrol smuggling will continue.”

Subsidy payment increases reduce funds for infrastructure development – Rewane

Analysts at the Financial Derivatives Company Limited, led by economic expert Bismarck Rewane, said they expect the positive sentiment of rising global demand to continue to impact the oil market in the next four to six weeks, keeping oil prices elevated above $70 per barrel.

They said in a new report, “While this is good news for Nigeria in terms of increased government revenue and dollar cash flows, it also has its downside.

“Since Nigeria imports all its refined crude, higher oil prices amid an exchange rate adjustment implies that landing costs have increased.

“Since fuel prices remain unchanged at N165/litre, it could mean that subsidy payments have increased, reducing the funds available for infrastructure development. Or, it could signify another petrol price increase in subsequent months. If this happens, it could stoke social unrest in an already terse socio-economic environment.”

https://punchng.com/petrol-landing-cost-hits-n232-subsidy-rises-to-n5-58bn-daily/

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Nbotee(m): 10:09am On Jun 28
I don already prepare my mind say dis useless ppl go soon increase fuel price.. What I don't even understand is why subsidy payments seems to be increasing despite the govt removing some parts of it severally? The same govt dat denied the existence of subsidy is now paying the highest subsidies ever

15 Likes 1 Share

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Fahdiga1: 10:10am On Jun 28
Why the rise in subsidy payment when Buhari has boldly told us he doesn't know what subsidy is ?

48 Likes 3 Shares

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Amotolongbo(f): 10:12am On Jun 28
He said the Federal Government was subsidising petrol with about N100bn to N120bn monthly (N3.3bn-N4bn daily) as it was being sold for N162 per litre.

47 Likes 6 Shares

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by iwaeda: 10:12am On Jun 28
Nbotee:
I don already prepare my mind say dis useless ppl go soon increase fuel price..

Main reason for regulating social media, so you will not protest.

39 Likes 1 Share

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by iwaeda: 10:19am On Jun 28
[quote author=Amotolongbo post=103159599][/quote]

The Chief Fraudster of Nigeria (CFN).

7 Likes 1 Share

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by iwaeda: 10:22am On Jun 28
N400 per litter loading grin grin grin grin grin

1 Like

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by iwaeda: 10:30am On Jun 28
They promised you one refinery per year, six years NO single refinery, everyone is waiting for Dangote that may not function this decade.

38 Likes 2 Shares

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by FarahAideed: 10:34am On Jun 28
Nobody is asking Buhari how daily petrol consumption jumped from 26 milllion litres a day under Jonathan to 60 million litres a day under Buhari oooooo.. that is where the biggest corruption in human history is happening as we speak .. Buhari govt paying subsidy for over 35 million phantom litres daily

49 Likes 6 Shares

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by DoctorDree(m): 10:34am On Jun 28
Nothing is working

2 Likes

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by FarahAideed: 10:35am On Jun 28
iwaeda:
They promised you one refinery per year, six years NO single refinery, everyone is waiting for Dangote that may not function this decade.

Even water refinery the criminal has not built and has no plan to

15 Likes 1 Share

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by iwaeda: 10:41am On Jun 28
FarahAideed:
Nobody is asking Buhari how daily petrol consumption jumped from 26 milllion litres a day under Jonathan to 60 million litres a day under Buhari oooooo.. that is where the biggest corruption in human history is happening as we speak .. Buhari govt paying subsidy for over 35 million phantom litres daily

How many can buy full tank for their vehicles, yet some evil people because of party and religion still see this government threading on the right path.

27 Likes 1 Share

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by DDDEnterprises: 10:43am On Jun 28
so you mean to say fuel don cost now sha?

1 Like 1 Share

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by valentineuwakwe(m): 10:48am On Jun 28
Enough no this petrol landing cost and subsidy wahala, let them increase the fuel price to N250 and see how NLC go react...
As for we Nigerians nothing we go do, we go still be suffering and smiling!

9 Likes

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by detroitred29: 10:50am On Jun 28
Ybdm
Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by lincsnuel: 10:50am On Jun 28
Nigeria have entered one chance

5 Likes

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Destiny365: 10:50am On Jun 28
It's getting real daily
Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by BeeBeeOoh(m): 10:50am On Jun 28
shocked



I don't know what subsidy is - Buhari


Same Buhari is paying for subsidy till this very day. What a scammer he is

10 Likes

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Nobody: 10:51am On Jun 28
Deregulate price to curb smuggling of product – IPMAN

The National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, in an interview with our correspondent, noted that the Group Managing Director of NNPC, Mallam Mele Kyari, had said last week that the pump price of petrol should be about N256 per litre.

He said the subsidy being spent on the product had increased significantly, saying, “The best thing is for the government to deregulate the price of petrol to curb the smuggling of the product outside Nigeria to neighbouring countries.

Basically that's the entire point of the argument

Subsidy has to go. Yes, prices will increase, yes Buhari is a bad leader and he has to go, yes, things have never been this bad.

But the truth is, the reason why we are here is because of rising subsidy costs

The cost of making one liter of petrol rises every year...so the amount of subsidy rises. If you want the subsidy to remain then government is going to spend a higher amount of money paying for it.

Oil prices are low. Our breakeven oil price now is $133. Right now oil is below $80. Nigeria, even if we get back all the looted money, won't be able to fund subsides under the current regime.

There is a reason why the GEJ admin removed subsides...until Nigerians said no. The more the cost of petrol rises, the more subsidy rises...and the more you drain your reserves and everything trying to fund it. And you get into more debt, and you end up having more issues.

And the more smuggling rises. We spend N165 on petrol here...meanwhile it costs above N350 ev erywhere else. Smuggling is too lucrative ....unless we want to keep our borders closed, and unless we want to build a fence.


So, abuse me, abuse my ancestors, abuse abuse.....but the cold reality is that if we want to stop wasting money and getting into more debt...subsidy has to go. Period. IT IS NOT BENEFITING THE POOR...it is TAKING AWAY THE SAVINGS OF THE POOR TO GET US INTO MORE DEBT

8 Likes 1 Share

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by BigDawsNet: 10:51am On Jun 28
One of the richest country in terms of Natural resources

5th largest Oil producing country in the world

Still 75% of the population are in serious poverty

12 Likes 1 Share

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by design106: 10:51am On Jun 28
shocked
It'll only get worse. We could as well get used to it already.
Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Thinktwicemybro: 10:52am On Jun 28
Any responsible government should be able to fix our refinery within six months- buhari 2011

4 Likes

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Yommychrz(m): 10:52am On Jun 28
9ja don finish kpatakpata

1 Like

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by seguno2: 10:52am On Jun 28
Amotolongbo:
He said the Federal Government was subsidising petrol with about N100bn to N120bn monthly (N3.3bn-N4bn daily) as it was being sold for N162 per litre.

Meaning that he is a fraudulent rogue for saying previously subsidies are fraud

5 Likes

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Sniper4real(m): 10:52am On Jun 28
Things are getting hard day by day.
Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by ogododo: 10:53am On Jun 28

3 Likes

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by joey150(m): 10:53am On Jun 28
Increase this fuel price once and for all.

Enough of this subsidy nonsense.

We have dilly-dallied for too long and things are worse now.

This country has been grossly mismanaged. It didn't start today. Started since 1960. Has to get ugly before it gets beautiful.

Next time when people are stealing and looting, let good people rise up and oppose them. You all stood by and watched politician after politician steal enough money for seven generations. Now, we must reap what we sow.

4 Likes 1 Share

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by seguno2: 10:54am On Jun 28
FarahAideed:
Nobody is asking Buhari how daily petrol consumption jumped from 26 milllion litres a day under Jonathan to 60 million litres a day under Buhari oooooo.. that is where the biggest corruption in human history is happening as we speak .. Buhari govt paying subsidy for over 35 million phantom litres daily

shocked angry

1 Like

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by BigSarah(f): 10:55am On Jun 28
angry make una do Wetin you wan do, stop yanking our tails
Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Odunolumide(m): 10:56am On Jun 28
"dem want to tell us another story again"- Tuface

2 Likes

Re: Petrol Landing Cost Now ₦232, Subsidy Rises To ₦5.58 Billion Daily by Hogan17: 10:57am On Jun 28
U will never find that Mannabbgrill girl on this thread

4 Likes

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