The Federal Government may have ended subsidy on Household Kerosene (HHK) also known as kerosene, as the price rose to N83 per litre over the weekend from N50 per litre.
The Petroleum Products Pricing Regulatory Agency (PPPRA), in its product pricing template released on Sunday, however, stated that the N83 per litre price applies only to the Nigerian National Petroleum Corporation (NNPC). This gives other dealers opportunity to determine their prices. While kerosene sold officially at N50, only few dealers complied to the price.
Again, the PPPRA’s template also showed that at N83 per litre, the Federal Government is making a gain of N10.72 for every litre, as it puts the Expected Open Market Price, which is the Landing Cost plus Total Margins at N72.28 per litre. The expected open market price is the prevailing open market rate for the product in Nigeria, after taking certain costs into consideration.
Giving a breakdown of the price, the PPPRA template put the Landing Cost of the product at N57.98 per litre, while the total margin due middlemen was put at N14.30.
Further breakdown of the Total Margins showed that retailers margin was put at N5 per litre; Transporters – N3.05 per litre; Dealers – N1.95 per litre; Bridging fund – N5.85 per litre; Marine Transport Average – N0.15 and Admin Charges – N0.15.