Those who criticized the past government of Goodluck Jonathan when it wanted to remove fuel subsidy, organized nationwide protests and resisted the policy of fuel removal should now see what the country missed by refusing that policy. This would have been a wonderful means to save lots of money, which most were going to the corrupt petrol importers and their cartel.
The report had it then, that most of the subsidy applications were fake and that those who applied to receive subsidy payments supplied nothing. Efforts of the government to check them met stiff resistance and mesmerizing bureaucratic paper works. After experiencing that, Goodluck Jonathan told Nigerians that the only way to save our economy and country’s financial wellbeing is to put immediate stop to subsidy payment.
The government of Gooodluck Jonathan told Nigerians but APC, as an opposition party, campaigned to their gullible supporters and paid a good number of them to canvass against the removal of the subsidy. The gullible supporters of APC, driven mostly by ethnic politics, took to the streets to sing and dance to put abrupt end to the government’s good intention to remove subsidy.
Nigeria, as at yesterday, is currently saving N647.2 million daily from the suspension of subsidy on Premium Motor Spirit, also known as petrol. Particularly, at the current price of N86.50 per litre in petrol stations across the country, the country is making an extra N16.18 per litre.
The Federal Government had stated that this extra savings is kept in an escrow account to serve as a cushion in case of eventuality, such as if the price of crude oil rebounds, leading to an increase in the selling price of PMS. The saving is partly due to the continuous decline in the price of crude oil in the international market, which dragged the open market price of petrol to N70.32 per litre. The amount the country is saving is based on a 40 million litres average daily consumption of PMS by Nigerians as declared by the Federal Government.
Since the announcement and commencement of the price modulation regime by the Federal Government, the open market of PMS had fluctuated between N4 and N12 per litre before rising to its current level. Data obtained, yesterday, from the Petroleum Products Pricing Regulatory Agency, PPPRA, in its pricing template for PMS for February 9, 2016, revealed that at a retail price of N86.50 per litre as approved by the Federal Government, the country is saving N16.18 per litre of the product.
The PPPRA put the landing cost of the product at N56.02 per litre, composed of Cost plus Freight — N51.19 per litre; Lightering Expenses — N2.02; NPA Financing — N0.15, Jetty Throughput Charge — N0.60 and Storage Charge — N2.00 per litre. In addition, total margins stood at N14.30 per litre, composed of Retailers, Transporters and Dealers margins of N5, N3.05 and N1.95 per litre respectively, while Bridging Fund, Marine Transport Average and Admin Charge stood at N4, N0.15, and N0.15 per litre respectively.
The PPPRA put the total cost of the product, which is the expected open market price at N70.32 per litre and the Ex-depot price, which is the price at which petrol stations owners buy from depot, at N76.50 per litre. Meanwhile, PPPRA is yet to resume the publication of the pricing template for kerosene, almost a month after reports that the Federal Government had discontinued subsidy on kerosene, as it hiked the price of the product to N83 per litre.
The PPPRA had on January 24, 2016, published the revised pricing template for kerosene, where it hiked the price of the product to N83 per litre. Two days later, the PPPRA yanked off the kerosene pricing template from its website and has failed to restore the template ever since. In the template last seen on the PPPRA’s website, it was revealed that at N83 per litre, the Federal Government is making a gain of N10.72 for every litre, as it puts the Expected Open Market Price, which is the Landing Cost plus Total Margins at N72.28 per litre. The expected open market price is the prevailing open market rate for the product in Nigeria, after taking certain costs into consideration. Giving a breakdown of the price of kerosene, the PPPRA template put the Landing Cost of the product at N57.98 per litre, while the total margin due for middlemen was put at N14.30.
Further breakdown of the total margins showed that retailers’ margin was put at N5 per litre; Transporters, N3.05 per litre; Dealers, N1.95 per litre; Bridging fund, N5.85 per litre; Marine Transport Average, N0.15 and Admin Charges, N0.15. The PPPRA further put official ex-depot price, which is the price depot owners would sell at marketers, at N68.70 per litre, official ex-depot price for collection, N73 per litre while ex-coastal price is N68.02 per litre.
From the data herein, it is clear that the previous government had foresight for the economy by being the first ever in the history of Nigeria to think about subsidy removal. But APC then saw it as an opportunity to bring the government down. They succeeded but turned around to impement the same subsidy policy of Goodluck Jonathan.