Audit-Report-on-NNPC
Audit-Report-on-NNPC
Audit-Report-on-NNPC
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Investigative Forensic audit of crude oil revenues and remittances by <strong>NNPC</strong> (January 2012 – July 2013)<br />
4.4.6.2. Divergence between the Official Retail Price, Expected Retail<br />
Price and Actual Retail Price of DPK<br />
<br />
PPMC c<strong>on</strong>firmed to us that after buying at N40.90 from <strong>NNPC</strong>/PPMC, the other marketers<br />
bear the cost of Lightering, NPA charges, Jetty throughput and Storage Charge which were<br />
expected to have been borne by <strong>NNPC</strong>/PPMC if <strong>NNPC</strong> were to bring DPK into its depots in<br />
Nigeria and sell at an ex-Depot price of N34.51 to other marketers.<br />
<br />
Using the PPPRA’s template for the calculati<strong>on</strong> of the Landing Cost of DPK, the minimum cost<br />
to the other marketers that ultimately bring DPK into Nigeria is N49.45 and not the official<br />
ex-depot of N34.51. Please see the table below for a breakdown of this minimum cost to the<br />
Other marketers.<br />
Descripti<strong>on</strong><br />
Amount N<br />
Cost of purchase from <strong>NNPC</strong>/PPMC 40.90<br />
Lightering expenses 4.07<br />
NPA Charge 0.68<br />
Jetty Depot Throughput 0.80<br />
Storage Charge 3.00<br />
Minimum cost to Other marketers 49.45<br />
Table D11: Analysis of the minimum cost of DPK to Other marketers; Source: <strong>NNPC</strong>/PPMC DPK PFI, PPPRA HHK<br />
Pricing Template<br />
Using the minimum cost to the other marketers (N49.45) and other parameters in the PPPRA’s<br />
Pricing Template, the expected retail price of DPK in Nigeria is reflected in the table below:<br />
Descripti<strong>on</strong><br />
Amount N<br />
Minimum cost to other marketers per<br />
49.45<br />
Litre<br />
Retailers margin/Litre 4.60<br />
Transporters Margin/Litre 2.99<br />
Dealers margin/Litre 1.75<br />
Expected Retail Price 58.79<br />
Table D11: Analysis of the minimum retail price of DPK to C<strong>on</strong>sumers; Source: <strong>NNPC</strong>/PPMC DPK PFI, PPPRA HHK<br />
Pricing Template<br />
<br />
<br />
<br />
Informati<strong>on</strong> in the public domain 53 revealed that the actual retail price of DPK sold by most<br />
marketers in Nigeria ranges between N120 and N140.<br />
<strong>NNPC</strong>, PPMC as well as PPPRA could not provide explanati<strong>on</strong>s for the difference between the<br />
expected retail price of DPK of N58.79 and the actual retail price per litre.<br />
The diagram below illustrates our findings <strong>on</strong> the pricing of DPK:<br />
53<br />
Actual retail price of DPK - http://www.thisdaylive.com/articles/kerosene-dpr-tasks-private-depot-owners-<strong>on</strong>-highprice/164477/Vanguardngr<br />
C<strong>on</strong>fidential informati<strong>on</strong> for the sole benefit and use of the <str<strong>on</strong>g>Audit</str<strong>on</strong>g>or-General for the Federati<strong>on</strong>.<br />
PwC 76
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