Even as a decision is yet to be taken on the vexed issue of removal of subsidies on petroleum products, the Federal Government last week disclosed that it has so far spent about N270 billion as subsidies on importation of the all-important importation of petroleum products by marketers in 2010.
Briefing journalists, the Executive Secretary of the Petroleum Products Pricing and Regulatory Agency (PPPRA), Mr. Abiodun Ibikunle, ruled out possibilities of fuel queues, assuring that government through the PPPRA has made adequate provisions to ensure uninterrupted supply of petroleum products.
Ibikunle also gave assurances that his agency was on top of fuel importation business in the country and that it was also on top of its mandate as the government’s agency that is saddled with the responsibility of regulating the importation of petroleum products and promoting healthy competition among various players in the downstream oil sector of the nation’s economy.
The PPPRA has been in the centre of allegation of unwholesome practices in the recent allocation of fuel importation licenses the second and third quarter of 2010, but the agency’s boss debunked allegations that the agency was allocating importation of products to “portfolio holding businessmen”.
According to him, the process leading to importation is very rigorous. He explained that apart from PPPRA, there are five other agencies that are also involved in the allocation process. This according to him makes it difficult for PPPRA to single-handedly disfavour or favour any marketer.
Defending his agency’s actions, Ibikunle disclosed that any company that must be allocated fuel importation must have storage facility, retail outlets, past record of performance, financial capability and other criteria. He affirmed that all those that were allocated products met minimum requirements including storage facilities.
“The agency has always been a strong advocate of self sufficiency. There are different categories of players in the downstream oil sector. These include, the Nigerian National Petroleum Corporation (NNPC), which is the largest player, this is followed by the major players and then the traders.
“Traders play vital role in the importation processes; they provide services to the major players and contribute effectively towards government intention of ensuring that petroleum products are readily available.
“PPPRA awards licence to markers who meet the criteria set by the agency, part of which is that the player should have a storage facility or have an agreement with someone that has a storage facility. The player must also have a tax certificate and meet all the requirements set by the agency.
“In allocating volumes of petroleum products to marketers, the agency gives priority to the NNPC having the largest facilities, next is the major marketers and then followed by the traders. We try to take care of all interest as much as we can by rationally allocating the product to all the players. However, all the players often complain that the volume allocated to them is insufficient. We have players who have facilities and do not have interest in importation; we also have cases where players that are allocated more volume do not even deliver at the end of the day. So what we have done is to strike a balance between the two groups by allocating the products rationally,” the PPPRA boss stressed.
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