PMS Analysis by Former Petroleum Minister

Prof. David Tam West-Former Petroleum Minister has analyzed the cost of refining PMS so that Nigerians will now what to ask the Federal Government. We really need to know how the Federal Government arrived at N145 per litre.

See the analysis after the cut..

1) One barrel of Crude oil = 42 gallons or 159 litres

2) Our Refineries (i.e 4) Installed (combined)

capacity = 445,000 barrels per day

3) Actual refineries capacity due to ageing

equipment = 30% i.e. 133,500 barrels per day.

4) 133,500 barrels = 21.2 million litres

5) Local required consumption (F.O.S) =

12millions litres

6) It means that even our MORIBOND refineries can actually meet our local consumption need of petroleum.

7) The cost structure of crude oil per barrel (i.e. Qua Iboe Crude Oil) production; -

- Findings / development - $3.5

- Production cost - $1.5

- Refining Cost - $12.6

- Pipeline/transportation - $1.5

- Distr/bridging fund Margin -$15.69

True cost of one BARREL of petroleum anywhere in Nigeria:

- Total sum cost/barrel = $34.8

- 1ltr cost = $34.8/159 litres = $0.219

- Naira equiv. 0.219xN160= N35.02k

- Add Tax N5 + N35.02 = N40.02

9) Let FGN refute the above composition and if not, they should tell us how they came about

N95/N85 litre.

10) Locally refined products cannot be sold at International price.

11) We really do not need FGN SUBSIDY as there was NONE in the first place.

12) What is LACKING, is the WILL to enforce LAW ON CORRUPTION.

Please share until it gets to the right quarters for their response; We still stand a chance as a COUNTRY.

Credit: Professor Tam David West, former Petroleum Minister