PEF: FG’s Planned Railway Concession Delays Rail Distribution of Petrol


Chineme Okafor and Amaka Mozie in Abuja

Nigeria’s plan to resume distribution of petroleum products through the railways has been put on hold by the federal government’s decision to concession the rail system, the Executive Secretary of the Petroleum Equalisation Fund (PEF), Mr. Ahmed Bobboi, has said.

Bobboi said yesterday at a workshop in Abuja that plans by the PEF to introduce railway petrol equalisation in the country to enable distribution of petrol through the rail lines, would not go on as planned until the government concludes its railway concession programme, which has now run into hitches.

He also explained that a new information technology (IT) system called sensor monitoring has been set up by the PEF to monitor and determine the volume of petrol consumed in Nigeria daily, as well as check diversion of petrol often reportedly done by dubious petroleum products marketers.

Additionally, Bobboi, noted that to incentivise the adoption and use of liquefied petroleum gas (LPG) which is also known as cooking gas by Nigerians, the agency has decided to introduce an equalisation scheme for LPG.

“We planned to introduce railway equalisation last year, but certain developments delayed it and one of them was the planned concession of the railways by the government and at a point General Electric showed interest and obviously we want to wait and see who will manage the railway system either the government or private sector,” Bobboi said.

He added: “We are also talking to the PPMC (Petroleum Products Marketing Company) and NARTO (National Association of Road Transport Owners) to get them involved in the railway transportation, and may be they will convert their tankers. This will reduce the pressure on our roads, as well as wear and tear on them. We are hoping it will happen very soon.”

Speaking on the censor monitoring system for petrol, he explained: “We have introduced some few policies recently and these include the sensor monitoring project which is going on now. This is major in the sense that it does not just stop at serving the PEF but also agencies like the National Bureau of Statistics which require information we provide on petroleum products landing in this country and the refineries.

“This is key because up till today, it is difficult to determine how much we consume in this country in terms of PMS (petrol). Different agencies give you different figures and I think it is not neat, but by introducing this sensor monitoring project, we believe it will serve the purpose of answering all these questions.”

“Censor monitoring was approved by the Federal Executive Council in August 2018 and it is supposed to run for three years. Work has already started and before the end of this year, we will begin to see some of the landmarks,” he added.

Speaking further on the LPG equalisation plan, Bobboi said it would enable Nigerians use more of clean fuel to cook, and probably minimise the current violence between cattle herders and farmers on account of climate change.

“Railway equalisation and LPG penetration, these are crucial to the existence of PEF because we feel by equalising gas in the country, we will help the government in its policy of trying to reduce desert encroachment and it is not only the government of Nigeria that is doing this but also the United Nations which is promoting clean environment,” he said.

According to him, the equalisation and bridging schemes of PEF are paid from upfront payments made by marketers who import or refine petrol in the country.