In 2009, Reuters estimates that it cost Nigeria between $15 to $30 to produce a barrel of fuel - including extraction costs (http://www.reuters.com/article/2009/07/28/oil-cost-factbox-idUSLS12407420090728).  Note the peak cost of barrel of crude oil in 2009 was $80.

In the absence of a reliable guide on how much refining petrol in Nigeria costs, I notice that internationally, the ($15 to $30) cost of producing a barrel of fuel represents around 74% of the total price at the pump ( http://business.whatitcosts.com/refine-oil-pg3.htm ).

If you gross the ($15 to $30) price up using a production cost to total cost percentage of 74% [/b]a guide price for a barrel of refined fuel is found to be between [b]$20 to $41. Note the market price of $100 in the papers includes demand (that is determined by  America, UK, China's EU etc market demand).  Any body who has run a business knows that own consumption is at marginal cost (ie if you eat in your own restaurant you cover your cost).

A barrel of oil contains 158 litres (divide the per barrel cost of $20 to $41 by 158 to get the per litre cost)

So a guide price of oil per litre should be 12 to 40 cents using Nigeria's production cost structure.  At current exchange rates (US$=N160) that is N19 to N64 per litre.  The top end is quite close to current price of a litre of PMS of N65. This price of N64 ignores demurrage and other non-value adding costs.  Also this cost may be what we should be paying if our refineries were working.

But obviously the above is filled with "ifs", but given the plethora of conflicting explanations from current and ex-Govt officials on this oil subsidy stuff I think we all deserve a reasonable explanation. That is a govt official explanation that does not assume we are standard 3 school children.