Amid rising crude oil price, the landing cost of petrol imported into Nigeria has increased to N186.33 per litre.
Recall that ALEDEH News had earlier this month reported that the landing cost of PMS rose by 13.34 percent to about N180 per litre on February 5 from the N158.53 per litre it was on January 7.
The global crude oil price affects the landing cost of petrol and pump price of the product due to the deregulation of the sector and removal of fuel subsidy by the Nigerian government last year.
According to the petrol pricing template of the Petroleum Products Pricing Regulatory Agency (PPPRA), the landing cost of the product increased to N186.33 per litre on February 16 as the pump price is expected to peg at N209.33 per litre.
The international oil benchmark, Brent crude, rose to $63.96 per barrel on February 16, from $59.34 per barrel recorded on February 5.
The rising price of crude oil pushed the cost of petrol quoted on Platts to $560.75 per metric tonne (N163.08 per litre, using N390/$1) on February 16 from $543.25 per metric tonne (N157.99 per litre) on February 5.
Also, the exchange rate of naira to the dollar contributed to the cost of imported petrol.
The cost of petrol would be higher if the 410/$1 rate at which the naira closed on Monday at the Investors’ and Exporters’ Foreign Exchange Window was used. The naira closed at 480/$1 at the parallel market.
Other cost elements that make up the landing cost include freight (N10.29), lightering expenses (N4.57), insurance cost (N0.25), Nigerian Ports Authority charge (N2.38), Nigerian Maritime Administration and Safety Agency charge (N0.23), jetty throughput charge (N1.61), storage charge (N2.58), and financing (N1.33).
The freight cost increased to $35.41 per MT (N10.29 per litre) last Wednesday from $30.04 per MT (N8.74 per litre) on February 5.
The pump price is the sum of the landing cost, wholesale margin and the distribution margins. The wholesale margin is N4.03 while the distribution margins comprise transporters allowance (N3.89), retailer (N6.19), bridging fund (N7.51), marine transport average (N0.15), and admin charge (N1.23).
Brent crude, against which Nigeria’s oil is priced, rose by $1.67 to $64.58 per barrel as of 6:08pm Nigerian time on Monday.