• PPRA Slashes Marketers List From 142 To 38

EXECUTIVE Secretary, Petroleum Product Pricing Regulatory Agency (PPPRA), Mr. Reginald Stanley, has attributed non-payment of oil subsidy to marketers since the beginning of the 2013 fiscal year to foreign exchange differential claims by marketers.

Reginald, who was speaking at a meeting with the Senate Committee on Petroleum Resources (Downstream) over the weekend, also stated that the number of marketers has been slashed from 142 to 38 as at December 2012, as part of oil sector reform measures.

His words: “There has been no payment for marketers importing petroleum products in 2013 because of delay in payment of subsidy claims by the Federal Ministry of Finance resulting in huge claims for foreign exchange differentials by marketers.”

But Committee Chairman, Senator Magnus Abe, urged the Federal Government to implement earlier promise of resuscitating refineries to reduce importation of petroleum products.

The Federal Government had allocated N971.138 billion for fuel subsidy in the 2013 budget as against the N888.1 billion allocated in 2012.

The 2013 indicates that the N971.133 billion is for “domestic fuel subsidy (marketers) (carry-over from 2011& 2012 provision for partial subsidy).

The PPPRA boss added that local consumption of PMS has also been brought down from 60.25 million litres per day in 2011 to 40 million litres per day.

“Between 2006 and August 2011, total government expenditure on petroleum subsidy amounted to N3.7 trillion. Expenditure on subsidies increased from N261 billion in 2006 to N673 billion in 2010, which represents an increase of about 160 per cent.

“Additionally, there have been unprecedented payments in 2011 that amounted to N1.4 trillion due, in part, to two key factors: increase in subsidy per litre as a result of rising global oil price, and large arrears due NNPC for household kerosene imports.

“2011 was like a gold-rush, where you had briefcase marketers. Local consumption rose to 60.25 million litres per day in 2011 but dropped to 39.66 million litres per day in 2012.

Most of the international traders, who did business with their Nigerian counterparts, were also briefcase traders, who would sell and run away. That practice, I can tell you, has since been cancelled.

According to Reginald, one of the biggest frauds in 2011 was “Bills for Collection” which was used to trade for petroleum products.

Speaking on some key challenges facing the PPPRA, he reiterated that the agency is yet to clarify the status of kerosene in terms of deregulation.

“There is lack of clarity on PPPRA and DPR’s roles in regulating the petroleum sector. Besides, there is lack of clarity on the subsidy status of household kerosene. We don’t know whether it has been deregulated or not.”