A cold war is brewing between oil marketers and their regulatory agency, Petroleum Products Pricing Regulatory Agency (PPPRA) over the former’s series of allegations against the agency.
The marketers, who said they were losing confidence in the management of PPPRA because of the deteriorating situation in the downstream sector of the petroleum industry, want it to live up to its responsibilities.
They expressed disgust over the way the Nigerian National Petroleum Corporation (NNPC) unilaterally changed the fuel template that had been fixed by PPPRA, a regulating government agency, from N111 ex-depot price to N117 per litre of petrol there by leaving the marketers with a loss of N1.03 per litre.
This situation has eroded the margins of the marketers, they claim. “When the ex-depot price was N111.72 we were making N4 per litre margin but when the NNPC unilaterally increased it to N117, we are left with a loss of N1.03 for every litre,” an industry source told BusinessDay.
The marketers under the umbrella of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) and Major Marketers Association of Nigeria have in various letters to the PPPRA expressed disgust at the way the agency was watching things getting worse in the downstream sector, and nothing was being done to stem the obvious downward slide of the sub-sector.
According to the letters, the marketers said they had wanted to communicate in one way or the other with members of the board of PPPRA for quite a while but decided to hold on to see what action the agency would take regarding the travails of marketers which activities the agency is supposedly regulating.
“It goes without saying from the records of the PPPRA that the number of active petroleum marketers is dwindling everyday and NNPC being sole importer has also contributed to the number further depleting,” the letter stated.
It further stated that PPPRA was not bothered about the dwindling number of marketers, nor bothered that the number of marketers submitting import proposal was also reducing by the day. “It is not disturbed that marketer’s payment converted to promissory note since last December 2018 has not materialised in monetary terms.”
The marketers said the PPPRA template has been obsolete for months, and that even though the agency updates it data base daily, it seemed to lack the courage to present same to the appropriate authority for necessary actions. The board of PPPRA would rather claim the exigencies of the moment and not take its rightful place and advise the Federal Government appropriately.
“The implication of elements here changing means that the prices all must change, but because it is a political hot potato nobody touches it, meanwhile the operators are dying gradually,” they noted.
“Despite spiralling cost that makes nonsense of the price template NNPC/PPMC took up the duty of PPPRA to caution against selling outside the band weight but when competition forces marketers to sell below band weight nobody says anything.”
When was the last time PPPRA calls for stakeholders meeting, this April 2019 no board and stakeholders meeting, the marketers queried.
In the letter the marketers claimed that for several months they have called for review of Calabar port but nothing has happened and yet the bore the financial burden of operations there, DAPPMA is losing confidence in the agency
MOMAN says PPPRA has a statutory role to play in the regulation of the downstream sector including the setting of prices and regulation of margins but it regrets to observe the ineffectiveness of the agency to perform this role currently.
“We hereby appeal to the board of PPPRA to urgently look into the myriads of problems plaguing the sector to avoid a total collapse of the sector especially as it affects the margins,” the group pleaded.
Efforts by BusinessDay to get the reaction of the PPPRA management were not successful as the phone calls and text messages sent to Abdulkadir Saidu, the executive secretary, and the general manager, public affairs of the agency, Reuben Apollo, were not responded to.
