The Federal Government has reportedly offered to pay subsidy on Premium Motor Spirit (petrol) from earnings made in the first quarter of 2016.

The FG to pay subsidy on petrol from the first quarter proceeds.See Also:My mother was kidnapped because I suggested removal of fuel subsidy- Okonjo Iweala

The Petroleum Product Pricing Regulatory Agency in a newly-released template said between January and March, the Federal Government was able to save about N10 billion as a result of selling the product above the expected open market price.

The expected open market price of Premium Motor Spirit (PMS) has risen to N99.38 per litre for independent and major oil marketers and N98.62 per litre for NNPC retail outlets.

The expected open market price was the actual price of the product without subsidy and was based on the current exchange rate of N197 to a dollar.

The template stated that at the current price of N86 per litre at NNPC retail outlets, the Federal Government was paying N12.62 per litre as subsidy on the product and N12.88 per litre as subsidy for other oil marketers’ price of N86.50.

See Also:Exposed! How NNPC witheld N4.9tr from the Federal Government

A breakdown of the template revealed that for NNPC retail outlets and independent and major oil marketers, the Landing Cost of PMS imported into the country was N84.32 and N85.08 per litre respectively,

It stated that the distribution margin, which include retailers, transportation, bridging fund and dealers margin, among others, stood at N14.30 for both the NNPC and other marketers.

According to the statement, this brings the current expected open market price to N98.62 and N99.38 for NNPC retail outlets and other marketers, respectively.

But for government’s decision to pay subsidy, the Federal Government would have in the next couple of days, announced a new fuel price, with the product selling at between N100 and N105 per litre for both the Nigerian National Petroleum Corporation’s, NNPC, retail outlets and stations belonging to other oil marketers.

See Also:NNPC announces the arrival of 7 cargo ships of fuel!

Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, had last month, during a visit to the Petroleum Products Pricing Regulatory Agency, disclosed that from May 2016, the price of Premium Motor Spirit would be reviewed to reflect current trends in the global petroleum industry.

Kachikwu had stated that the review in the prices was supposed to be done in April, but had to be suspended because of the fact that the country had been able to save a lot of money within the first three months of the year, adding that the savings would be used to fund the gap recorded in pricing in April.

The new price of petrol according to reports will soon be announced by Minister of State for Petroleum, Mr Kachikwu.

Photo credit: thewillnigeria.com

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