The Petroleum Products Pricing Regulatory Agency (PPPRA) has announced that audited Premium Motor Spirit (PMS) or petrol already in tanks at various depots of petroleum marketers in the country would not qualify for payment of subsidy claims.

The decision was reached at a meeting with operators in the downstream sector, hosted by the PPPRA in Abuja, last week.

The meeting was convened to address crucial issues in the downstream, arising from the deregulation of the PMS market by the Federal Government as announced by the PPPRA on January1 this year.

A document sighted by The Tide source, explained that in determining the subsidy computation for last month, stock of PMS, certified by independent inspectors in tanks belonging to petroleum marketers as at January 1, would not qualify for subsidy claims.

The action, initiated by the PPPRA in line with the transparency regime, initiated by the new Executive Secretary of the agency, Stanley Reginald, was designed to prevent the Federal Government from losing huge revenues through submission of subsidy claims by marketers, who are currently selling the products to the public at deregulated prices.

The document stated that the year-end stock taking exercise at the depots, carried out nationwide on January 1, was done primarily to determine the actual consumption of gasoline nationwide, following the spiraling consumption figures of the product over the years.

It affirmed that the PPPRA’s monthly stock taking exercise at the depots would continue during the regime of deregulation.

According to our source, the meeting was convened by Reginald to solicit the co-operation of all operators for the success of the deregulation policy and to enable him clarify crucial issues relating to the modalities of implementation of the policy.

At the meeting, the PPPRA chief itemised the thrust of the new policy as it related to fuel importation under a deregulated regime and implementation of the indicative benchmark pricing system.

It was resolved that import volume determination by independent cargo inspectors would be maintained for monitoring and data collection purposes by the PPPRA and that the agency would also continue to provide maximum indicative benchmark prices every fortnight for depots and open-market retail sales outlets.

At the meeting, the PPPRA maintained that a pricing template was the final guiding document for importation, storage, transportation and sales of petroleum products in the current deregulated dispensation, stating that no operator was at liberty to alter any of the cost elements.

According to Reginald, following the new pricing regime, marketers who sell above the indicative benchmark price, provided by the PPPRA will be subjected to serious penalty by relevant regulatory agencies, including the revocation of their import or operating licenses by the Department of Petroleum Resources.

The PPPRA, however, noted that all operators should view the current template as a take-off point, while the agency sought means of developing a reactive template that would capture sudden and emerging realities.

The agency charged industry operators to improve on their efficiency since downstream operation was volume-driven and that the current PPPRA pricing template was adequate in ensuring cost-recovery on petroleum product imports by marketers.

The agency also gave an assurance that it would continue to issue quarterly import permits to marketers in the exercise of its regulatory mandate.

Reacting to the position of the PPPRA, industry operators, including members of the Major Oil Marketers Association of Nigeria, Depot and Petroleum Products Marketers Association and the Independent Petroleum Marketers Association of Nigeria, collectively welcomed the deregulation policy of government, promising to support the policy in full force.

Marketers, however, stressed the need for the Nigerian Police Force to ensure safety of all depots, trucks and retail outlets from possible threats, following post-deregulation protests.

They advised the PPPRA to host a bankers’ forum to address issues relating to petroleum products financing, to boost the confidence of the banking sector in the downstream.

The marketers also called for adequate repair of roads in the country to ensure smooth haulage of products by transporters, calling for the implementation of the FERMA Act, relating to five per cent user charge on petroleum products for road maintenance.