With the open market price of premium motor spirit (PMS) rising to N92.34, the federal government has returned to petroleum subsidy, as it insists on retaining the current price.
According to the petroleum product pricing regulation agency (PPPRA), the government will begin to pay N5.84 on every litre of petrol sold from April 1, 2016.
The template also revealed that on every metric tonne of PMS, the federal government will pay a subsidy of at least N7,824.84.
With a consumption level of at least 33 million litres per day, the federal government would pay N5.782 billion on subsidies in April alone – if the template remains unchanged.
Though the federal government never really removed subsidy, it didn’t have to pay it based on the global prices of crude oil in the first quarter of the year.
Farouk Ahmed, immediate past executive secretary of PPPRA, said in February that the FG was saving N13.81 on every litre of PMS sold.
He however added that the money made by the federal government in over-recovery would be saved for a rainy day – to pay petrol subsidy, when the prices spike again.
Assuring that the pump price of petroleum products would not be increased, PPPRA said the pump price of Kerosene, which was not affected by the new template, would also remain unchanged.
In a subsequent statement by Lanre Oladele, head, corporate services at PPPRA, the agency said: “The NNPC has 41.73 per cent of the total allocation, while the rest of the oil Marketing Companies got a total allocation of 58.27 per cent.”
The statement quoted Sotonye Iyoyo, acting executive secretary of PPPRA, that the agency would retain the retail prices of N86.00 for the NNPC and N86.50 for the other marketing companies.
It added that the pump price of Household Kerosene (HHK) would also remain unchanged from what it was in the last quarter.
“Therefore, marketers are advised to ensure that there is no price distortion in their respective retail outlets,” she said.
PPPRA said it would continue to monitor the global oil market performances and make reasonable changes consistent with the newly-adopted price modulation principles.
It urged depot owners to strictly adhere to the prevailing truck-out policy made by the agency, to ensure that petroleum products get to their designated retail outlets nationwide.
The agency warned against hoarding products, saying there are no plans to raise the prices.
“PPPRA is resolutely committed to the sustenance of its reform initiatives, in order to further guarantee adequate supply of products nationwide.
“We therefore assure Nigerians of our total commitment to service delivery, in the quest to deliver on our mandate to the people of Nigeria.”