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1.0. INTRODUCTION
The PPPRA products pricing template (Daily & Monthly) is a pricing
information sheet detailing the components used in deriving the PPPRA
daily/monthly guiding products prices. It employs Import Parity
Principle and this includes;
(i) Landing Cost of Products
(ii) Margins for the Marketers, Dealers, and Transporters
(iii) Jetty-Depot Through-put
(iv) Other charges and Taxes
The objectives of the pricing template are:
- Transparency
- Full cost recovery
- Fairness
- Responsiveness
- Efficiency
- Competitiveness
2.0. DESCRIPTION OF COMPONENTS ON THE PRICING TEMPLATE
With Effect from February 2009
1. PRODUCT COST ($/MT)
This is the monthly moving average cost of products cost as
quoted on Platts Oil gram. The reference spot market is North
West Europe (NWE).
2.
FREIGHT ($/MT)
This is the average clean tanker freight rate (World Scale
(WS) 100) as quoted on Platts. It is the Cost of transporting
30, 000mt (30kt) of product from NWE to West Africa (WAF).
Trader’s margin of $10/MT is also factored into the
Freight cost.
3.
LIGHTERING EXPENSES ($/MT)
STS/Local Freight charge is the cost incurred on the
transshipment of imported petroleum products from the mother
vessel into daughter vessel to allow for the onward movement of
the vessel into the Jetty. This charge includes receipt losses
of 0.3% in the process of products movement from the high
sea to the Jetty and then to the depot. The mother vessels
expenses are based on the allowable 10 days demurrage
exposure at the rate of $28,000 per day.
The Lightering Expenses also includes the Shuttle vessel’s
chartering rates from Offshore Lagos to Lagos and Port Harcourt
which currently stands at N2.00 per litre and N2.50
per litre respectively. Transshipment (STS) process is as a
result of peculiar draught situation and inadequate berthing
facilities at the Ports.
4.
NIGERIA PORT AUTHORITY (NPA) CHARGE ($/MT
It is the cargo dues (harbor handling charge) charged by the
NPA for use of Port facilities. The charge includes VAT and
Agency expenses.
Currently, NPA charge attracts $10.50/MT on the pricing
template.
5.
FINANCING
It refers to stock finance (cost of fund) for the imported
product. It includes the cargo financing based on the
International London Inter bank Offered Rates (LIBOR)
rates+5% premium for 30 days (for Annual Libor
rate of 2.07%, LIBOR cost would be 7.07%). Also included in the
Finance cost is the inertest charge on the subsidy element being
awaited for an allowable 60 days period at Nigerian Inter Bank
Offered Rate (NIBOR) rate of 22%.
6.
JETTY DEPOT THRU PUT
This is the tariff paid for use of facilities at the Jetty
by the marketers to move products to the storage depots. The
value is currently N0.80/litre.
7. STORAGE
CHARGE
Storage Margin is for depot operations covering storage
charges and other services rendered by the depot owners. The
charge is currently N3.00/litre.
8. LANDING
COST
It is the cost of imported products delivered into the Jetty
depots. It is made up of components highlighted above (1, 2, 3,
4, 5, 6 and 7).
9.
DISTRIBUTION MARGINS
These include Retailers (N4.60 per litre),
Transporters margins (N2.99 per litre), Dealers margin (N1.75
per litre), Bridging Fund (plus Marine Transport Average) (N6.00
per litre) and Administrative charge (N0.15 per litre).
This amounts to N15.49 per liter on the template. The
overhead cost and other running costs have been considered in
the determination of these margins.
10. TAXES
These include highway maintenance, government, import and
fuel taxes. It has the overall objectives of revenue generation,
social infrastructure investment and servicing and efficient
fuel usage. Presently, all these attract zero taxes.
11. RETAIL
PRICE
This is the expected pump price of petroleum product at
retail outlet. It is made up of landing cost of imported product
plus reasonable distribution margins.
Pricing Template - PMS
Pricing Template -
HHK
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