Following the drop in crude oil prices in the international market as a result of the COVID-19 pandemic and oil price war between Saudi Arabia and Russia, the federal government is now realizing over N2billion as ‘over-recovery’ from the importation and selling of Premium Motor Spirit (PMS) otherwise called petrol.
Over-recovery is when the recommended retail price (pump-price) of petrol per litre is higher than the landing cost of petrol.
As at Monday, 9th March 2020, the landing cost of petrol, according to the pricing templates of Petroleum Products Pricing Regulatory Agency (PPPRA), was N96.85 per litre. However, with the addition of the total distribution margin for marketers, the Expected Open Market Price (EOMP) was N116.22 per litre.
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By deducting the EOMP of N116.22 per litre from the recommended retail price of N145 per litre (which is the price consumers are currently paying for petrol at filling stations), the federal government will realize (N145 – N116.22 = N28.78) N28.78 per litre.
However, the truck-out statistics obtained from the website of the PPPRA showed that 72,881,528 litres of petrol were trucked out on Monday, and by implication, it means the federal government would have realized (N28.72 x 72,881,528litres = N2,097,530,375.84).
N2,097,530,375.84 as excess payment by consumers of petrol in Nigeria from the product distributed on Monday.
Meanwhile, as crude oil prices hover around $30 per barrel while Brent Crude was selling at $33.49 per barrel on Wednesday, the landing cost of petrol will remain below N145 per litre.
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