There
are strong indications that the Federal Government would start paying
N163m daily as fuel subsidy to oil marketers because of the slight
increase in crude prices. A survey of markets around the world showed
that oil prices, including Nigeria’s Bonny Light 1have increased from
about $29 to $40 per barrel, meaning additional cost to refining
companies, which pass the high cost to traders. Consequently, Petroleum
Product Pricing Regulatory Agency, PPPRA, which had discouraged
government from paying subsidies because of prolonged era of very low
crude prices, has advised it to start payment. The agency believed it
has become necessary for the President Muhammadu Buhari-led
administration to commence subsidy payment from this month. In its
April, 2016 template posted over the weekend, the agency put the subsidy
at N4.09 per liter.
This amounted to N163m daily as the
nation’s estimated daily demand for fuel hovered at 40 million liters.
PPPRA puts the nation’s landing cost for fuel, including cost and
freight, traders margin, lightering expenses, NPA, NIMASA, jetty/depot
thru charge and storage charge at N75.79 per liter. The agency put total
sub margins, including administrative charge, marine transport average,
bridging fund and margins at N14.30 per liter. It puts total cost,
including highway maintenance, government tax, import tax, fuel tax and
subtotal taxes at N90.09 per liter. PPPRA also puts the official
ex-depot, ex-depot and ex-coastal prices at N71.70, N76.00 and N71.19
and arrived at an under recovery of N4.09 per liter. Executive
Secretary, Major Marketers Association of Nigeria, Mr. Femi Olawore said
in a telephone interview yesterday that the subsidy is justified
because of the slight increase in oil prices. He said the subsidy would
enable marketers to recover cost involved in the process of importing
fuel into the country. It was learnt that government would need to pay
more as subsidy, should crude oil prices continue to surge in the global
market. However, there was improvement in fuel supply because of the
involvement of many stakeholders over the weekend. A visit to Apapa in
Lagos showed that many marketers were involved in lifting of fuel to
many destinations. The involvement followed an agreement signed with
tank seven farm owners for the storage and lifting of imported fuel few
days ago.
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