Saturday, December 19, 2015

Petrol May Sell Below N87/Litre Soon & Here's Why

The pump price of petrol might fall below the official N87/litre soon, the NNPC has announced.

The state oil company said it is working out a template with the Petroleum Product Pricing Regulatory Agency (PPPRA), which might make the commodity sell for less thant N87 per litre next year.

Group General Manager, Corporate Planning and Strategy, of NNPC, Bello Rabiu, said the cost of bringing one litre of petrol to the country currently was N65.

The logistics for bringing it to the depot and to the filling stations, he said, is about N10.55. The distribution cost is N15.49 while the open market as at today is N91.52/litre.

“Now, if you take away N87, which is regulated price, it means that subsidy is basically N4.85. If we are consuming 41 million litres, it means we are subsidizing N200 million a day.”

“If we can look at this one that is N91.52 and we pray we can get about N15 off there, that will bring it down to a little more or less than N80. If we take off N10.50, we come down to N81. If we take it down to N7.52, we come down to N85.

“So you can see that the price we have today, if we look at the template can come down, and many Nigerians will believe that there is no subsidy.”

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