The Federal Government Has Officially Removed Fuel Subsidy

The federal government has officially stopped payment of subsidy on the premium motor spirit, PMS, popularly known as petrol.

This was indicated by the absence of the usual subsidy component in the latest Petroleum Products Pricing template from the Petroleum Products Pricing Regulatory Agency, PPPRA, The official pricing template for petrol by the PPPRA as of December 28, 2015 saw the Federal Government subsidizing the product by N6.45 per liter when the Estimated Open Market Price, EOMP, which is the summation of the landing cost of petrol and subtotal margins which include transporter’s cost, dealer’s charge, bridging fund, administrative charge, at that time was N93.45.

With the new EOMP being lower than the retail price of N86.5 set by the Federal Government as what petrol should be sold nationwide, this means that Nigerians are paying an extra N1.4 for the commodity whenever they buy PMS at non-NNPC run petrol stations and N1.22 extra for every liter of petrol bought at NNPC-run filling stations.