We can use a netback calculation method to determine the expected revenue obtained by the DSDP partner if the petroleum products were sold in Netherlands. The gross product revenue of a refined barrel of crude oil is the sum of the volume yield (fraction) of each refined product multiplied by its price. Therefore the expected gross revenue of the DSDP partner would have been (129.58*0.0889 + 307.80*0.4333 + 256.45*0.2222 + 85.50*0.0889 + 323.86*0.1667) or $263.43. The expected take of the DSDP partner would be ($263.43 – $76.41) or $187.05. The expected profits of the DSDP partner would have depended on the difference between its expected take ($187.05) and the cost of loading the crude oil, taxes, shipping the crude oil to the foreign refinery, refining the crude oil, loading petroleum products of equal value to the crude, taxes, shipping the petroleum products to NNPCL at the designated Nigerian port, offloading the petroleum products, and more taxes etc. The NNPCL take would be $76.41 or equivalent in value ($76.41) to the I bbl of crude oil received from NNPCL.
The DSDP partner delivered petroleum products (PMS, Diesel, and Jet Fuel) of Nigerian standard specification to NNPCL on Delivered at Place (DAP) basis, at designated safe port (s) in Nigeria. NNPCL sold the petroleum products to distributors/marketers at domestic landing cost prices. An additional expense of about $6.34/bbl was incurred as distribution margins by the distributors/marketers. NNPC can claim fuel...
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