The Federal Government said it would pay subsidy on petrol, otherwise known as Premium Motor Spirit (PMS) from the recoveries made in the first quarter of this year. This is contained in the latest Petroleum Product Pricing Regulatory Agency (PPPRA) template released in Abuja on Monday.

It said between January and March, the federal government was able to save about N10 billion by selling the product above the expected open market price. According to the new template, the expected open market price of the PMS has risen to N99.38 per litre for independent and major oil marketers and N98.62 per litre for NNPC retail outlets. It added that the expected open market price was the actual price of the product without subsidy and it was based on the current exchange rate of N197 to a dollar.

It said that at the current price of N86 per litre at NNPC retail outlets, the federal government was paying N12.62 per litre as subsidy on the product and N12.88 per litre as subsidy for other oil marketers' price of N86.50. The News Agency of Nigeria (NAN) reports that a breakdown of the template revealed that for NNPC retail outlets and independent and major oil marketers, the Landing Cost of PMS imported into the country was N84.32 and N85.08 per litre respectively.

It stated that the distribution margin, which include retailers, transportation, bridging fund and dealers margin among others stood at N14.30 for both the NNPC and other marketers.