downstream petroleum distribution and marketing, as part of the President Muhamadu
Buhari’s measures to stem the high level of corruption in subsidy claims.
Consequently, retail outlets found selling any petroleum product above the prescribed
government price will be immediately shut down, while any depot selling above the ex-
depot price will have to forfeit the subsidy claims on the cargo that brought in the
product.
The move followed the apparent inability of the industry regulators, the Department of
Petroleum Resources, DPR, and the Petroleum Products Pricing Regulatory Agency,
PPPRA, whose officials were apparently overwhelmed by the supply shortages to check
sharp practices and market excesses among the operators.
Consequently, the DPR has scheduled another impromptu closed door meeting with
marketers and other industry stakeholders today (Wednesday) at its Headquarters in
Lagos, to update them on the new development.
Confirming the development yesterday, a top industry source who also attended the
meeting told Vanguard in a telephone interview that the decision was made known to
stakeholders at a closed door meeting which held in Abuja on Monday.
The source, who spoke in confidence said: “DSS will lead the operations (monitoring),
and marketers were also asked to monitor each other and to report any sharp
practices. “Government decided that enough was enough and will no longer condone
any sharp practices in the system.”
The source, disclosed that the meeting was at the instance of the Federal Government,
and had in attendance the representatives of the DSS, DPR, PPPRA, Major and
independent marketers, depot operators and a host of other industry operators.
The source added that attendants sat for long hours deliberating on the best way to
arrest the unofficial price hike of petroleum products in the market, occasioned by
supply shortages following the inability of the government to pay markets outstanding
subsidy claims of over N200billion.
Sudden hike in price
The source was responding to Vanguard’s enquiries on the cause of the sudden
unofficial hike of both the pump price and ex-depot price of premium motor spirit, PMS,
popularly called petrol and kerosene, and the helplessness of the industry regulators to
arrest the situation.
Since the supply shortages set in some months ago, marketers and depot operators
took the initiative to hike pump and ex-depot prices to reap enormous profit while
waiting for government to pay off their outstanding claims.
As a result, practically every retail outlet sold petrol at above the prescribed N87/Litre,
to peg price at between N100 and N150/Litre depending on the outlet and location.
Similarly, rather than the prescribed N81/litre ex-depot price, marketers accused the
depot operators of selling at N96/litre instead, which they claimed forced them to also
hike pump price.
He said: “Such practices will no longer be condoned especially with the involvement of
the DSS, who will use their intelligence network to get to the root of the matter.
“The meeting decided that all marketers must sell at the regulated price of N87/litre of
petrol. And anyone found to be selling above this, the DSS will track the outlet to the
depot where the product was lifted.
“If it was discovered that the pump price increase is as a result of hike in ex-depot
price, then both the outlet and the depot will be sanctioned.
“Originally, it was agreed that both the outlet and the depot will be shut down, but after
considering the situation, if was agreed that the depot will not be shut down in order
not to exacerbate the supply situation.
“However, the depot operator will be made to forfeit his subsidy claims on that cargo,
as it will be assumed that he has reimbursed himself through the ex-depot price hike.”
“We are meeting with DPR again tomorrow (today) on the same matter for them to tell
everybody what is happening and the need for all to ensure compliance,” the source
added.
DPR meets with stakeholders
Expressing shock at the takeover of parts of its functions by the DSS, a top
management official of the DPR confirmed the upcoming meeting with stakeholders in
Lagos today.
The official, who also spoke in confidence in a telephone interview told Vanguard: “The
Downstream Unit only informed us about the meeting holding tomorrow at about 4p.m.
today.”
He expressed shock that the Unit did not give them full disclosures on the reasons for
the impromptu meeting saying: “It is sad that everybody now do territorial claim when
the whole roof is caving in. if there are new developments we should know firsthand
and not from a third party.”
Agreeing that the DPR was overwhelmed by the sharp practices in the industry, he
asked: “How can we effectively monitor a situation where the marketer shows us
technical proof about the depots selling above the ex-depot price, and the depot
operators in turn show prove at selling under the regulated price?
“We heard their accusations back and forth, and decided to hold an impromptu meeting
with them in Lagos a few weeks ago, which was also reported by your paper. Since it
was an open meeting, we expected the parties to openly make their allegations. But
nobody did. So how can we hold anybody responsible?”
He, however said that the involvement of the DSS was a welcome development as long
as it will bring sanity to the system, seeing that DPR lacked the capacity to fully monitor
downstream operations.
Source : Vanguard
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