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FUEL AGENCY CLARIFIES PRODUCT ALLOCATION REGIME, DENIES INTERFERENCE

By NBF News
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THE Petroleum Products Pricing Regulatory Agency (PPPRA) has denied any official interference in its process of allocating importation quotas to marketers.

Speaking to the media yesterday in Abuja, the Executive Secretary of PPPRA, Mr. Goody Egbuji, said it was erroneous for anybody to insinuate that its processes were interfered with since the ministerial approval for the second quarter importation was given on March 31, 2011 and that letters to that effect have so far been collected by marketers that were selected.

He further explained that the international dimension of the processes involved in allocation of quota to marketers made it difficult for any manipulation.

The PPPRA boss said: 'It should be borne in mind that the operating price boundaries for products are well established by both international and industry standards as shown in the PPPRA template, thereby leaving no room for any manipulations or extraneous factors. In order words, there is no way such tightly determined margins can accommodate additional burden as being alleged.'

He explained that to underscore the integrity of the process and officials that are involved in the process, the selected marketers for the second quarter allocation have so far collected their import permits without making any payment to the agency or any of the officials of the agency.

Marketers that got the approval to import petroleum products for the second quarter include the Nigerian National Petroleum Corporation  (28.6 per cent), depot owners (51.9 per cent), throughput agreement (12.5 per cent), new suppliers with depot (1.4 per cent) and new suppliers with throughput (5.6 per cent).

The Petroleum Support Fund (PSF) is an interventionist fund established to help mitigate the volatility of crude oil prices in the international market.

PSF mandate guidelines also seek to ensure products availability through the regulation of petroleum products supply and distribution; ensure a virile and viable downstream sector where cost recovery is guaranteed plus a reasonable profit margin, as well as the prevention of restrictive trade practices harmful to the sub-sector.

Egbuji highlighted that the PPPRA has worked assiduously within the regulations and framework provided by the PSF by ensuring strict compliance with all established parameters.

'But tried as we could, certain unfortunate developments have continued to recur aimed at discrediting our efforts and cast aspersions upon our credibility as a regularity agency,' he said.

The PPPRA boss insisted that the insinuations of underhand dealings in the allocation of products importation quotas were orchestrated by some elements who were bent on subverting the regulatory reforms being instituted by the agency's new leadership.

He added: 'It is a fact that the insistence of the Agency that participation in the PSF scheme continues to be on established standards have not gone down well with many people, who would have wished they had their way in their applications.'

Egbuji stressed that as long as there was subsidy on petroleum products, those who want to benefit from it would continue to undermine the system for their selfish reasons.

He stressed: 'We will continue to have people who would want to undermine the system in as much as we have deregulation in place. Why are people not going into the importation of diesel and kerosene?   The reason is simply because there is no much subsidy on those products even though government still subsidises kerosene heavily and there is no subsidy on diesel anymore. The way forward will be to remove subsidy and we will have fewer people in the business of importation because the prices will solely be driven by market forces.'

The online publishing outfit had of recent been awash with allegations of underhand dealings in oil allocation to marketers, some alleging that $8 bribe is demanded for every tonne of product allocated to marketers.