PPPRA: This Baptism of Fire

07 Dec 2012

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For the Petroleum Products Pricing Regulatory Agency (PPPRA) under the current leadership which just marked one year in office last month, the last two weeks can be said to be its own baptism of fire by the media.

For right or wrong reasons, every organisation, especially those in the public eye, often have their day in the media court.  And since journalism is history written in a hurry, many a time, many organisations get undeservedly bruised even without having the privilege of turning in all the facts of their case.  Some others get their dessert and the deserved knocks and go home sulking and sad thereafter.
Two weeks ago, the Chief Executive of the Agency and his team came calling at the National Assembly to honour the invitation of the Joint Committee of the Senate and House of Representatives on Petroleum (Downstream) to defend the budget of the Agency.

It was in the course of handling this important task that something went the unexpected way.  The whole drama centred on how much accrued to the Agency through its internally generated revenue and the use to which it was put.  The PPPRA boss had informed the lawmakers about the N5.7 billion that was generated and listed the sub heads under which the fund was expended in line with what was approved by the budget office for its 2012 overheads and personnel.

In the spirit of true democratic practice and wanting to asset its authorities, the legislators had reaffirmed the role of the legislature in respect of appropriation and proceeded to warn sternly that the MDAs have no power to expend any fund without the legislature appropriating it.  The PPPRA boss was invited for a second session the following day and the lawmakers’ job was done for the day.
It was from here the media took over.  The following day the media was awash with screaming headlines on how N5.7 billion was blown on staff, as one newspaper noted in its headline.  Days later, some newspapers, drawing from the drama on the floor of the House and the sensational report by their correspondents, took position – in editorials – calling on authorities to scrap PPPRA.

Indeed, a sober study and analysis of the encounter will bring out two salient facts and they are: One, what the lawmakers were after that day was to establish their authority, perhaps rightly, that by law, the role of the legislature to appropriate is sacrosanct and cannot be compromised; two, it was never in dispute that the sum of N5.7 billion was appropriated for overheads and personnel for the agency in the 2012 Budget, what was in contention was where the fund was sourced from.
For any discerning analyst, it may not be too far to see that this may just have been much noise over little or nothing.

First, contrary to the impression created about a major secret deal blown up, the overheads and personnel cost of the Agency (not salary and allowances alone) went through the rigour of budget scrutiny and was duly appropriated.  At no time during the session did the lawmakers describe the salary and allowances of PPPRA as something they were getting to know for the first time.
And contrary to the submission of N5.7 billion divided by 249 members of staff, that appropriation was for both personnel and overheads such as expenses incurred in its operations duly vetted by the budget office.

Indeed, little effort at information gathering would have shown that what PPPRA staff earn is not different, or rather, similar to what obtains in other agencies of government in the oil and gas industry such as Nigeria Petroleum Development Trust Fund NPDTF, Petroleum Equalization Trust Fund PETF, Petroleum Products and Marketing Company, PPMC, among others.
Indeed, it is because of this standard salary structure that staffers of one of the agencies are routinely transferred to others as the situation requires without such workers feeling shortchanged, or unduly favoured.

The Agency’s Chief Executive, Reginald Stanley, had cause to correct the wrong impression of a jumbo salary days later, describing it as a gross misrepresentation of what he said while appearing before the august committee.
He said the sum of N5.7billion, when broken down into sub-heads, actually accounted for staff salaries and allowances, National Contributory Pension, Pension Payments, National Health Insurance Scheme, Pay-As-You-Earn tax element, overheads, and other sundry deductions, consistent with what obtains in other MDAs, especially in the oil and gas sub-sector. He quickly added that ‘PPPRA DOES NOT operate a peculiar salary structure independent of what obtains in other sister organisations within the oil and gas sub-sector. We are fully aligned with other organizations on what we earn. We receive budgetary allocations on yearly basis, like others, and we account for every kobo spent, in the spirit of transparency and accountability, all for the good of our country.’

In the hysteria of joining the mob to lynch a perceived wrong doer, the danger we face is the possibility of dealing deadly blows on the innocent only to discover the error of judgement after the act has been committed.
Downstream oil sector analysts will readily attest to the efforts PPPRA has put into the works of sanitizing that sub sector in the last one year.

Records clearly show that owing to some stringent measures put in place by the new leadership of the Agency, PPPRA has brought down payment on subsidy by 49.7 per cent in 10 months when what was paid between January and October this year is compared to what was paid during the same period in 2011.

While the Federal Government paid N1.351 trillion as subsidy between January and October 2011, what was paid during the same period this year came to N679 billion, with NNPC receiving N337.7 billion while other marketers received a combined figure of N342 billion. With this feat, the agency has been able to save some N671 billion in 10 months for the nation.
Of course, anyone familiar with this industry will testify to the fact that achieving this took some efforts.

Since November 2011 when the Reginald Stanley-led team took over at the agency with a clear mandate by the supervising ministry to restore sanity to petroleum products importation business, the team has hit the ground running and it has not looked back.  Indeed, the first step Stanley took which gave a clear signal that he meant business was the pruning down of the oil importing and trading companies licensed to import products from an all- comers and unwieldy 126 to 42 by the first quarter of this year.
Not just that the figure has today been brought down to a manageable 39, stringent measures and regulations have been put in place to enthrone transparency, accountability and quality service delivery.

A few of these measures will suffice in this analysis.  One of the earlier measures taken by the Agency following the resumption of office of the current Executive Secretary was the restriction of participation in fuel importation to only owners of coastal discharge/depots facilities, thus reducing participation in the PSF Scheme to only genuine and capable marketers.  This move has achieved an added advantage of motivating more investments in the development of petroleum handling facilities, thereby promoting local content development and ensuring better management of participants in the PSF scheme.

Such agencies of government in the oil and gas industry include the Nigeria Petroleum Development Trust Fund NPDTF, Petroleum Equalization Trust Fund PETF, Petroleum Products and Marketing Company, PPMC, among others.
For an agency that has proven in the last one year and two months that things can work here if right personnel are put in right positions to become a victim of media mob action over a salary structure that was legally instituted and to have its achievements rubbished in the process is a baptism of fire that could strengthen the victim after serving the onslaught.

A better and more result-driven PPPRA may as well be in the works.

•Yakubu wrote in from Lagos

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