Landing cost of fuel rises by 46.8 per cent and now N1,026.71 per litre— Investigation
There are indications that the landing cost of Premium Motor Spirit, PMS, otherwise known as petrol rose year-on-year, YoY, by 46.8 per cent to N1,026.71 per litre in May 2024, from N545.83 per litre, recorded in the corresponding period of 2023.
The landing cost excludes other additional costs which include deport-related charges, transportation logistics and marketers’ margin, which would combine to bring delivery at filling stations at nearly N1,052.39/litre, at an Exchange rate of N1,510 to a dollar (a differential of N458.71 per litre).
This is contrary to claims by the federal government that the Bola Tinubu administration has scrapped subsidies on petrol.
Sources around oil marketers told Energy Vanguard that the landing cost for June is expected to rise further as the factors that propelled the rise in May figures have worsened as of last week.
Giving further insight, they said foreign exchange has been a major concern where scarcity has persisted while the exchange rate has also continued to deteriorate.
The marketers also noted that the cost of fuel import is rising in response to the recent rises in the price of crude oil in the international market.
A transactional analysis of a major operator, sighted by Vanguard yesterday showed that marketers were paying N1,052.39 per litre as total direct cost.
A breakdown shows product cost per litre at N1,026.71, freight (Lome-Lagos) at N10.37, port charges at N7.37, NMDPRA levy of N4.47, storage cost at N2.58, Marine insurance cost at N0.47, fendering cost at N0.36 and ”others” at N0.06 as well as a finance cost amounting to N28.04.
Specifically, the transactional analysis put the landing cost of 28,000 metric tons of imported petrol at over $25 million, including total product cost, total direct cost, and total finance cost, capable of generating more than N39 billion as sales revenue, indicating a loss of over N19 billion.
Marketers remain upbeat as petrol scarcity enters third week.
As a result of this development, the marketers said it would be unprofitable to import at the current pump price, while the government has not guaranteed a free float of pump prices.
Consequently, the Nigerian National Petroleum Company Limited, NNPCL, has remained the only importer of the product.
The situation appears to be worsening as Nigerians are forced to struggle with the cost of living as a hike in transportation has resulted in an increase in goods and services across the country.
