The Petroleum Products Pricing Regulatory Agency, PPPRA, has given insight into how it arrived at the new petroleum pump price of N87 per litre, asserting that it was informed by components of the prevailing petroleum products pricing template.
This pricing template indicates the ex-depot price, which is the price that marketers of the product are to pay for products they lift, and the expected open market price of petroleum products.
Disclosing this on Monday, the Executive Secretary of PPPRA, Farouk Ahmed, explained that based on the landing cost of N74.35 per litre of PMS as at the close of business on Friday, January 16, 2014, the addition of distribution margin of N15.49 per litre would translate to an open market price, or pump price of N89.84 per litre.
He held that the price is actually N2.84 higher than the N87 per litre approved by the Federal Government and announced on Sunday by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke.
As such, he drew the attention of Nigerians to the fact that the Federal Government would still be subsidizing the new petrol price by N2.84 per litre.
The PPPRA boss then charged marketers to adhere strictly to the new price regime, stressing that his agency would work with the Department of Petroleum Resources, DPR to enforce compliance to ensure that consumers benefited fully from the new review.
While threatening that, “any violation of the prevailing price regime shall attract appropriate sanctions,” the agency advised Nigerians to avoid all forms of panic-buying, assuring that there are enough products in all depots across the country.
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