The Federal Government of Nigeria over the weekend hiked the price of Household Kerosene from N50 to N83 per litre thereby ending the subsidy on the product.
The Petroleum Products Pricing Regulatory Agency, PPPRA , in its product pricing template released, weekend, however, stated that the N83 per litre price applies only to the Nigerian National Petroleum Corporation (NNPC), meaning that other petrol stations and dealers can sell higher than the stipulated amount.
The hike in the price of kerosene is coming at time when the price of crude oil and its by-products have drastically fall on the international market. Kerosene, petrol and diesel prices have significantly dropped in many countries but the reverse seems to be the case in Nigeria.
The PPPRA’s template also showed 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, 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. 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.
