Premium Motor Spirit, also known as petrol, will sell for a minimum N205 per litre if the federal government succumbs to the pressure on it to completely deregulate the downstream sector of the market today. This much can be deduced from a document recently released by the Petroleum Product Pricing Regulatory Agency (PPPRA).
According to the document, which also shows the performance of the sub-sector in the first quarter of the year, there was an all-time high in the landing cost of PMS. It rose from N189 per litre on April 25, 2018, to an 8.47 percent increase at N205 by May 16, this year.
Luckily, this trend, which was experienced between May 10 and May 16, has not had a direct effect on the actual cost of PMS sold to motorists, as the product is still sold at N145 per litre.
The PPPRA document reveals that the subsequent indirect PMS subsidy by the NNPC has left the corporation with an overhead cost of N60 per barrel sold.
With a total consumption of 4.89 billion litres of PMS distributed in the first quarter of 2018, according to National Bureau of Statistics, on an average daily consumption of 50 million litres, NNPC’s subsidy on the commodity will be N3.26 billion daily
On this note, therefore, analysts project that if the Federal Government deregulates the downstream today, PMS may be sold at no less than N205 per litre.
Image Credit: Daily Trust
