PPPRA to Deduct Excess Fuel Pricing from Subsidy Claims

19 Nov 2012

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  As marketers hike ex-depot price

By Ejiofor Alike

As part of the moves to check the current profiteering among oil marketers, the Petroleum Products Pricing Regulatory Agency (PPPRA) will this week move into the depots to identify marketers selling petrol above the official recommended ex-depot price of N87.66 per litre, THISDAY has learnt.

It was gathered that any marketer found to be selling above the recommended price will be made to cough out the excess pricing from his subsidy claims.

This development came amid increasing concerns that the hike in the ex-depot price of petrol by the marketers has worsened the current fuel crisis.

Investigation revealed that only the Nigerian National Petroleum Corporation (NNPC) sells petrol at the government approved ex-depot price to marketers with which it has Bulk Purchase Agreement.

The private oil marketing companies and other few importers, it was learnt, sell petrol at ex-depot price of between N94.50 and N97, with third party suppliers selling at N99 per litre.

This development has made it difficult for petrol to be sold at the official pump price of N97 per litre at the filling stations, especially in the hinterlands.

The hike in ex-depot price has, however, attracted the attention of the PPPRA, which has concluded plans to move into the depots this week to identify erring marketers.

A source at the agency told THISDAY at the weekend, that any marketer found to be selling above the official ex-depot price would not be entitled to subsidy claims.

“We don’t have the powers to enforce price but we cannot allow marketers to claim subsidy on products sold at above the official price. So, we want to check the depots for record purposes, so that when they bring their papers to claim subsidy, we will tell them that they are not entitled to subsidy because they did not sell at the official recommended price,” he said.

For instance, NIPCO Plc was selling its imported petrol at the ex-depot price of N94.50; Sahara, N96.00; Rahamaniyya Oil and Gas Limited, N96.00 and Folawiyo, N96.50.

THISDAY gathered that unlike the independent marketers and depot owners, the major marketers – Conoil, Forte Oil, Mobil Oil, Oando, Total and MRS, however, give rebate of between N2.50 and N3.50 per litre to their marketers, depending on the marketer’s volume of sales.

Defending the hike in the ex-depot price, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Alhaji Abdulkadir Aminu, told THISDAY that the marketers were faced with serious challenges in the downstream sector.

“We have issues in the industry and the President must address these issues. The whole industry is in shambles. All the companies are in red. No marketer can meet overhead costs and I am telling you that there will be mass retrenchment if the challenges are not addressed,” he said.

Aminu disclosed that the Sovereign Debt Notes (SDNs) of marketers that wanted to claim subsidy had not been honoured by the government.

“SDN is as good as cash but some of us have been holding these SDNs for three months without the government honouring them,” he added.

Tags: Nigeria, Featured, News, PPPRA

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