By Adewale Sanyaolu
Rising prices of crude oil may have pushed petrol landing cost to N307.04 per litre in Nigeria, findings by Daily Sun have revealed.
Oil prices have witnessed a steady rise since the crisis between Russia and Ukraine began some four weeks ago hitting $95 per barrel last week. As at 4.40pm Nigerian time yesterday, Brent crude dropped marginally to $92.25 while West Texas Intermidiate (WTI) was $90.89.
For Nigeria, the N307.04 per litre petrol price translates to a subsidy of N143.04 per litre compared to the Federal Government’s approved retail price of N164 per litre. But beyond the rising crude oil price, other ancillary costs that often shoot up petrol landing cost in the country to N307.04 per litre include; Lightering Expenses; N0.37, NPA; N2.16, NIMASA Charge; N0.23, Jetty’Throughput; and N1.61, Storage Charge; N2.58.
Others are: Admin Charge; N1.00, Transporters Allowance; N3.89, Retailers’ Margin; N6.19, Bridging Fund; N7.96 and Marine Transport Average (MTA); N0.15.
Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, in January said the Nigerian National Petroleum Company (NNPC) Limited, had requested the sum of N3trillion as fuel subsidy in 2022.
“In 2022, because of the increased crude oil price per barrel in the global market, now at $80 per barrel, and also because NNPC’s assessment is that Nigeria is that the country is consuming 65.7 million litres per day, that we would end up with an incremental cost of N3 trillion in 2022,” the minister added.
According to Ahmed, by implication, the Federal Government will have to make an incremental provision of N2.557 trillion in order to meet subsidy requirements which currently average about N270 billion per month.
Meanwhile, the Executive Director of the International Energy Agency (IEA), Fatih Birol, said on Monday that the OPEC+ producers would need to pump in more oil to close the widening gap between nameplate production quotas and actual output.
The laggards in the OPEC+ oil output targets should look to produce more to balance the tight market, Birol said at the Egypt Petroleum Show in Cairo yesterday, according to Reuters.
If OPEC+ continues to fail in delivering its oil production targets amid rising demand and inventories at multi-year lows, oil prices will remain under upward pressure and are set for more volatility, the IEA said in its monthly report.