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PEF Bridges To Ensure Uniformity In Petroleum Prices

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The Executive Secretary of the Petroleum Equalisation Fund
(PEF), Mrs Adefunke Kasali in this interview gives an insight into the
operation of the PEF. Excerpts:

 

Question: Could you tell us in brief what your Fund does as
it relates to the deregulation of the downstream oil sector

Answer:The Petroleum Equalisation Management Fund was
established many years ago, in 1973 to be exact, and the mandate of the fund
and the board is basically to ensure that marketers who bridge petroleum
products from point of receipt to their retail outlet are reimbursed

for the transport element of that transport activity in
order to ensure that government policy of uniform prices are fulfilled, and the
board has been doing that since all these years.

Our three major schemes are the bridging, the inter-district
scheme and the equalisation scheme.

To give you an idea, what that means, bridging is the
transportation of products over a period in excess of 450 km. It involves going
from one depot which is the loading depot to the receiving depot, and it has to
be in excess of a 450 km

The inter-district is the same thing, from loading depot to
the receiving depot but this time around, it is less than 450km.The
equalisation scheme is when a marketer loads from the receiving depot to his
retail outlet.

For instance, if the marketer is located in Abuja
environment, the marketer will move from, let’s say, a loading facility in
Lagos, could be Ejigbo satellite depot, he will first of all move that product
to Suleja which is a receiving depot which is a PPMC depot and then, from
there, he will move his product to Abuja.

Question:You talked about uniformity in the pricing, against
the backdrop of the deregulation, though the government price is N97, you still
find people selling it as much as N150, is that uniformity in pricing still
viable?

Answer:I think it is important to go to the background of
our uniformity in prices. Our country is vast. The terrain is very different
from area to area. There are some that are very swampy; in the south-south, you
find creeks and petroleum products are best transported through pipelines.

We all know what happened to pipelines in the recent days’
vandalism, sabotage, breakdown, poor maintenance over the years, has caused the
integrity of some of those pipelines, in fact, majority of them have been
questionable.

When you then move petroleum products through them and you
know somebody is just waiting to hack them once they know that petroleum
products are moving, it creates all kinds of issues.

That’s why we see the concept of bridging, that is, moving
these products by trucks come up a lot in the last few years. PEF as an
organisation is the one that then takes care of that bridging activity without
which, movement of petroleum products and the receipt of the product around the
country will be very difficult.

That idea behind uniformity is that you shouldn’t be
disadvantaged based on where you live. If you live somewhere that is not easy
to get pipelines through the place, then you shouldn’t be penalised for living
in that area.

As to the issue of the pricing, we found out that in some
areas, that there are some unscrupulous marketers that probably take advantage
but it’s not everywhere they take advantage of the situation. It is usually
worse when there are things happening in the country when you see the hike in
prices at retail outlets.

But generally speaking, you find out that prices are around
about where government has put them. (N97).

Question: Some marketers have complained of delay or refusal
to pay them, what are you doing in this regard?

Answer:There are some marketers that we refuse to pay
because they have issues with us, either because we found out that they have
submitted questionable documentation with us to come and collect reimbursement
from us. In that case, if they have bad or questionable weigh-bill, there will
be necessary delays in processing some of these claims until we resolve all of
these claims.

There are times in the past when we have had delays in
payment and if you come to our office, and have a look at where we put all
these claim files. It is in stacks and stacks of files.

(Cuts In)

Question:Why should you allow stacks to mount, if they were
attended to on time?

Answer: We don’t allow them to mount, unfortunately, the
rate at which they bring them is just far outweighs the ability to properly
scrutinise those files and we have to ensure that we are not just paying
government money, without ensuring that those documents are valid.

We have to ensure their veracity, we have to ensure they
loaded the products, we have to ensure that they delivered the product and so
in the process of doing all these confirmation, with the staff we have, it is
very tedious.

The other thing is that, sometimes we just don’t get the
document that we need to do the confirmation. And so, we have a process now
whereby the loading facility and the receiving facility must both send us those
claims and we then match them. Otherwise, somebody might load and not deliver
them and come and make claims. We are a responsible organisation and we cannot
allow that to happen and so may cause delay in some cases.

Question: As a follow up, are there sanctions for
defaulters? How many have you been able to pay in the last two years?

Answer: The act establishing the fund has a penalty in
there, but it is very old. It is like N50,000 (Fifty Thousand Naira.) When the
act is revised by the PIB, that will change. That’s not very punitive, it just
puts it on us, and we have to do the proper work to make sure if the penalty is
not deterrent, then we sort them out and sift these things out (files).

On our marketers’ list, we have thousands of marketers, and
on the retail list, all independent marketers. We deal with major marketers, we
deal with DAPPMA marketers. And so we have very many marketers, and we process
well over 100,000 claims every year.

So if a marketer moves a product now and concluded the
transaction, he may wait to move 10 or 15 other transactions and put them in
altogether. So all those individual lifting, we have to find the receipt of
payments, the invoice and the delivery confirmation, the loading confirmation
for each and every one of them.

So in a file that contains 20 meter tickets representing 20
liftings, that work has to be done for each of those 20 loadings, but we have
now been able to design a soft ware that we are just now in the process of
verifying, and perfecting that will do that matching for us automatically.

But when we don’t get data from all the facilities involved,
then again we will just slow the process down.

Question: The software that you talked about, could it be
the planned electronic loading scheme project Aquila, how much has PEF been
able to save for Nigeria from the introduction of that project?

Answer: That project, the software I was just talking about,
is something we designed along the way, that’s not the Aquila. We have been
working on Aquila since December 2007. We have spent the last four years
perfecting it and doing all the other implementation on project Aquila.

Project Aquila will actually eliminate all the things that
we are talking about here. With project Aquila, the first thing is that there
must be a loading and receiving. One of the issues that we have had is that we
are never sure whether a product was loaded or received. In some cases we have
had situations where it was purportedly received but it was never loaded.
Aquila will ensure that there is a genuine transaction.

The other thing with Aquila is that the product is now very
smooth and efficient and then the payment is done under two weeks. So you don’t
have the delay because it is now all electronically done.

With Aquila we have moved to an end-to-end electronic
solution where it is loaded and dispatched by a mobile computer working with an
RFID device. So that at each of our depots, our depot representatives have this
device, this is the mobile computer; part of it and this is the RFIDD device,
which reads the information.

On every truck registered and tagged there is this RFIDD tag
that is affixed on that truck and all the information on that transaction is
actually stored on the device. The software is re-writable and so when the
transaction is ready; our depot representative reads all the information from
our server unto this device and dispatches the truck electronically.

Right now, the manual system we have to stamp and they
falsify our stamps. Now there is no stamping required, you just go in there
once it is dispatched, that information from this device once the truck has
been let go that information automatically goes into the server in our head
office and at the receiving depot where that truck is headed.

By the time the truck gets there in two or three days or
however long it takes that truck driver to get there, that information is
already sitting on the server and when the truck gets there the depot
representatives at our receiving depot basically goes to the truck and verifies
that information.

 

To be continued

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Oil & Energy

Rivers PETROAN Elects 12-Member Executive 

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The Petroleum Products Retail Owners Association of Nigeria (PETROAN), Rivers State Branch, has elected a 12 – member executive to steer the affairs of the association for the next four years.
The executive, elected during the Annual General Meeting (AGM) of the association, at it’s secretariat in Port Harcourt, and sworn in immediately after the election, was mandated to, among other things, tackle the adulteration of petroleum products as well as address irregularities in meter readings across the state.
The newly elected executive include, Pastor Ezekiel I. Eletuo  as  Chairman,  Kanu Addeson C. as Vice Chairman , Dr. Ejike Jonathan Nnbuihe as Secretary,  Fidelis A.Inaku as Treasurer and Lady C. N. Ekejiuba as Financial Secretary.
Others are Anaenye Anthony as Publicity Secretary, Arc. Kingsley O. Anyino as Organising Secretary, Nze Peter Ezenwa as Chief Whip, and Sunny Williams as Auditor.
Other members of the executive included Chidiebere Ronel Akwara as Welfare Officer, Ibe Chimaobi C. as Legal Adviser, and Emetoh Chizoba as Assistant Secretary.
Inaugurating the new leadership, PETROAN Zonal Chairman, High Chief Sunny G. Nkpe, charged the team to build on the achievements of the outgoing executive.
He urged them to collaborate with stakeholders in the petroleum sector to ensure industry stability and address issues of multiple taxation.
Nkpe who emphasized the need for transparency, accountability, and an open-door policy in administering the union, insisted these principles remained crucial in advancing the association’s objectives and improving members’ welfare.
The zonal chairman also commended the outgoing executive for their accomplishments during their tenure and for conducting a smooth transition process.
He further described their efforts as instrumental in strengthening the union’s standing in the state.
In his acceptance speech, the new Chairman, Pastor Ezekiel I. Eletuo, thanked members for their confidence and pledged to improve on the foundations laid by the previous administration.
He promised his leadership would be guided by transparency, accountability, fairness, unity, and integrity.
Eletuo called on all members to support the new executive in its efforts to elevate the association.
Also speaking, the immediate past Chairman, of the association, Sir Chilam Francis Dimkpa, expressed appreciation to members for their support during his administration and stressed the need for them to extend the same cooperation to the new leadership.
Dimkpa highlighted key achievements of his tenure to include capacity building for members, increased union visibility through media advocacy, and the establishment of stronger ties with stakeholders, corporate organisations, and individuals.
He also acknowledged the support of the state government, the Police, the Department of State Services (DSS) and the Nigeria Security and Civil Defence Corps (NSCDC).
Stakeholders present at the event also delivered their goodwill messages.
Highlights of the event included  administration of oath of office to the new executive and the presentation of certificates of return by the zonal chairman.    .
By: Amadi Akujobi
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FG Intensifies Efforts To Reposition Tourism Sector 

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The Federal Government has intensified efforts towards reposition Nigeria’s hospitality and tourism industry for global competitiveness, aimed at strengthening regulation, professionalism and workforce standards across the sector.
This was made known last week when the National Institute for Hospitality and Tourism (NIHOTOUR) conferred  fellowships, inducted professionals and inaugurated the governing boards of the Hospitality and Tourism Sector Skills Council of Nigeria (HTSSCN) in Abuja.
The high-profile event, held at Merit House, Maitama, drew senior government officials, regulators, tourism operators, cultural institutions, hospitality investors and development partners in what stakeholders described as a major institutional shift .
Government also formally inducted registered practitioners into various professional categories while also inaugurating the Board of Trustees and Board of Directors of the HTSSCN, an employer-led platform designed to align workforce competencies with industry expectations.
Speaking at the event, the Minister of Art, Culture, Tourism and the Creative Economy, Hannatu Musa Musawa, said the initiative represented a strategic intervention to strengthen accountability, standards and institutional coordination within Nigeria’s tourism and hospitality ecosystem.
According to the minister, Nigeria’s vast cultural assets, tourism destinations and creative talents can only translate into sustainable economic value through professionalism, regulation and globally accepted operational standards.
She noted that tourism and hospitality industry remains one of the fastest-growing sectors globally, contributing significantly to employment generation, foreign exchange earnings and cultural diplomacy.
Musawa explained  that NIHOTOUR Establishment Act has expanded the institute’s mandate beyond training, positioning it as a regulatory and certification authority for hospitality, tourism and travel practitioners in the country.
“No sector can attain sustainable growth without structure, standards, institutional coordination and skilled professionals,” she said, stressing the need for stronger collaboration between government agencies, operators, training institutions and private sector stakeholders.
In his keynote address, the Director-General and Chief Executive Officer of NIHOTOUR, Abisoye Fagade, described the event as a historic turning point in the formalisation of Nigeria’s tourism and hospitality industry.
Fagade said the induction of practitioners, conferment of fellowships and inauguration of the HTSSCN governing boards marked the beginning of a new era of institutional governance, professional recognition and sector-wide coordination.
“Regulation and standardisation are no longer optional; they are economic necessities if Nigeria truly intends to compete globally,” he stated.
By:  Nkpemenyie Mcdominic, Lagos
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Big Oil Reconsiders Previously Unattractive Destinations

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The Middle Eastern crisis has prompted a reprioritization among international oil companies. Previously unattractive drilling destinations are suddenly looking quite attractive—even Alaska.
The oldest oil and gas producing part of the United States has for years been out of the spotlight as the industry moves to cheaper and faster-growing locations. The only news of any substance about Alaska recently was the Biden administration’s approval of the Willow project, led by ConocoPhillips, which was set to boost the state’s oil output by 160,000 barrels daily, and Australian Santos’ Pikka project, set to start commercial production this year. That was years ago. Now, Big Oil is eager to drill in Alaska.
Earlier this month, a lease sale in the National Petroleum Reserve in Alaska attracted record bids, worth a total $163 million. Among the bidders were Exxon, Shell, and Repsol, with the latter already partnering with Santos on the Pikka development. And this may be just the beginning.
Related: Saudi Aramco Looks to Raise $10 Billion from Real Estate Asset Deal
The Bureau of Land Management offered 625 tracts across about 5.5 million acres for bid in the sale, revived at the end of last year by the Trump administration. No lease sales were held in the National Petroleum Reserve in Alaska under President Biden. Yet under Trump’s One Big Beautiful Bill, there will be a total of five lease sales in Alaska over the next ten years.
“With the imminent start-up of the Pikka project on the North Slope, the reversal in the decline of oil production in the great state of Alaska is going to help put more oil in the Pacific area at an important moment,” Repsol’s head of upstream operations, Francisco Gea, said as quoted by the Financial Times. Gea called Alaska “a fantastic opportunity”. The Pikka project, which has a price tag of $4.5 billion, will produce up to 80,000 barrels daily.
It is indeed a fantastic opportunity, at the very least because it is nowhere near the Middle East and as such is a highly secure energy exploration destination. Canada is in a similar position, by the way: the head of the International Energy Agency earlier this month told an industry event Canada had a golden opportunity to step in as a secure energy supplier in a world that’s currently 14 million barrels daily short on supply because of the Middle Eastern crisis.
Security, then, is what has prompted Big Oil to return to the North—even Shell, which left in 2015 after writing off as much as $7 billion on an unsuccessful drilling campaign hampered, among other things, by strong environmentalist opposition. According to the Financial Times, the supermajor’s decision to partake in the latest Alaska lease sale was surprising for analysts.
However, according to chief executive Wael Sawan, the lease sale concerns a different part of the state. “It is a very, very, very different part of Alaska that we have gone to,” he told the Financial Times. “This is an onshore exploration opportunity in a very well-established basin that has been producing for some time… So this is not offshore Alaska where we have had the challenges in the past.”
Crude oil is not the only thing drawing the energy industry to Alaska in these times of oil and gas trouble. Gas is also a magnet—in this case, in the form of the Alaska LNG project. Interest in the Alaska LNG export project has spiked since the war in the Middle East choked 20% of global LNG supply and sent Asian buyers scrambling for expensive spot cargoes.
Glenfarne Group, the majority owner and developer of the facility, aims to sign binding offtake agreements with buyers soon and advance final investment decisions to later in 2026 and early 2027, company executives told media earlier this year on the sidelines of an energy conference in Tokyo.
“There’s a real interest, particularly with everything happening in the Middle East right now. Everyone would like to get those (preliminary deals) turned into long-term agreements,” Adam Prestidge, president of Glenfarne Alaska LNG, told Reuters in March.
Alaska LNG is designed to deliver North Slope natural gas to Alaskans and export LNG to U.S. allies across the Pacific. An 800-mile pipeline is planned to transport the gas from the production centers in the North Slope to south-central Alaska for exports. In addition, multiple gas interconnection points will ensure meeting in-state gas demand.
The latest Alaska developments show clearly how the Middle East war has put energy security back in the spotlight, making previously challenging locations desirable again. With an estimated 1 billion barrels of oil supply wiped out of markets since the war began, according to Aramco’s Amin Nasser, alternative supply sources have become urgently needed, and not just for the short term. Even if the Strait of Hormuz reopens soon—which at the moment seems unlikely—energy security will in all probability remain a top priority both for energy producers and for consumers.
By Irina Slav for Oilprice.com
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