The PPPRA which is regulates the prices of petroleum products in the country had on January 1 revised its pricing template.
According to Daily Trust, which obtained data from the Petroleum Products Pricing Regulatory Agency (PPPRA), an average of N5.77 was saved on a litre of petrol per day, and N6.66 on a litre of kerosene daily.
The PPPRA which is regulates the prices of petroleum products in the country had on January 1 revised its pricing template - it erased the usual subsidy component to negative subsidy on the products.
Before the release of the revised template, the Expected Open Market Price (EOMP) which is the true cost of the products was usually higher than the pump price at filling stations. The difference between the Retail Price and the EOMP was what the federal government paid as subsidy to oil marketers.
The new EOMP however is lower than the Retail Price meaning a negative subsidy and that Nigerians are paying extra for the commodities whenever they buy them at both NNPC and non-NNPC run filling stations.
The Group General Manager, Corporate Planning and Strategy of the NNPC, Mr. Bello Rabiu, explained that the negative subsidy (the extra amount which would be recovered from marketers), would be remitted to the Petroleum Support Fund (PSF) in line with the PPPRA guidelines.
He had said the savings will be kept as a buffer to fund future subsidy (if any) that may arise during high oil price regime.
A breakdown of the savings going by the negative subsidy amount of an average N5.77 per litre for petrol throughout January showed that close to N7.1bn was saved based on a 40 million litres daily PMS consumption.
For kerosene, based on Pipelines and Products Marketing Company (PPMC) calculations of 11m litres average daily consumption and N6.66k per litre negative subsidy, close to N2.3bn may have been saved, bringing it to a total of N9.4 billion for January.