The federal government will have to pay N40.70 for every litre of imported petrol to maintain retail price at N145 per litre.
The group managing director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, said this at a press conference in Abuja.
Baru said the landing cost of petrol is now N171 per litre.
Landing cost is the total price of a product once it has arrived at a buyer’s door.
It includes the original price of the product, all transportation fees (both inland and ocean), customs, duties, taxes, insurance and currency conversion.
“The landing cost comprising CIF (cost, insurance and freight) of petrol as of last Friday was in the neighborhood of $620 per metric tonne, so with the official exchange rate of N305 to the dollar, the landing cost should be N171.40 per litre,” he said.
“The government has consistently indicated that N145 per litre is the price and it has mandated the NNPC to keep the depot price at N133.28 per litre, so as to maintain a cap of N145 per litre.
“So, there is a lot of profit in between after taking the transportation cost of N7 off; there is sufficient margin for marketers in that PPPRA template at the price cap.”
According to the Petroleum Products Pricing Regulatory Agency price template, marketers are allowed a profit margin of N14.30 to cater for distribution costs.
Some fuel stations have been selling petrol for as high as N250 in some states as a result of fuel scarcity and long queues could be seen at those stations.
In 2016, the Buhari administration announced that it would no longer pay subsidy with Vice-President Yemi Osinbajo, saying the decision helped remove a monthly burden of N15.40 billion from the neck of the federal government.