Expected open market price of PMS now ₦112.26
Nigeria: Petrol Motor Spirit (PMS) landing cost has dropped below the pump price range of ₦135-₦145 set by the Federal Government.
On its website, the Petroleum Products Pricing Regulatory Agency (PPPRA) latest product pricing template shows landing cost at ₦92.89.
However, total distribution margin was calculated to be ₦19.37, which in addition to landing cost translates to expected open market price of .₦112.26.
In December, 2019 expected open market price of PMS was about ₦170, and the amount surpassed ₦145 pump price up till recent time.
FG has been subsidizing the difference between expected open market price and pump price of PMS for the citizen.
Due to the oil shock which has impacted the global prices of oil significantly, analysts think it is right time for FG to remove subsidy.
Brent crude oil dropped to $34 per barrel litre on Friday, as against $57 used to prepared 2020 budget.
Recall that the Organisation of the Petroleum Exporting Countries failed talk on supply cut saw oil price plunged.
In addition, coronavirus (COVID-19) fear which has affected the Chinese and other large economies have supported the trend.
Meanwhile, on Friday, Timipre Sylva, the minister of state for petroleum resources, said consultations are ongoing to decide if the pump price of petrol will be reduced.
Expected open market price of PMS now ₦112.26, should FG remove subsidy?