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Marketers accuse PPPRA of price manipulation, corruption

By on February 4, 2015

Oil Marketing and Trading (OM&T) companies and other importers of petroleum products have accused the Petroleum Products Pricing Regulatory Agency (PPPRA) of manipulating the pricing mechanisms in its template and lacking transparency in the management of the Petroleum Support Fund (PSF) scheme.

Some of the Chief Executive Officers of these companies, who spoke to THISDAY at the weekend, accused the PPPRA of corruption by removing the pricing template in its website against international best practices established by Platts and other organisations that publish oil prices.

They alleged that by removing the pricing template, which forms the basis for payment of subsidy claims, the management of PSF now lacks transparency.

One of the CEOs, who did not want his name in print for fear of having his quarterly fuel import allocations slashed or withheld, told THISDAY that the PPPRA wants to drag the country back to the “dark days of unbridled corruption in the payment of subsidy to marketers.”

“The prices of products are not supposed to be official secret if PPPRA has nothing to hide. The International Air Transport Association (IATA) publishes Jet Fuel Monitor, showing the price of jet fuel worldwide. The Jet Fuel Price provides the latest price data from Platts, showing the global average price. Platts also publishes oil prices, which are available on subscription. But our own PPPRA, which is saddled with the responsibility of managing PSF established with public fund is hiding the prices of petroleum products from Nigerians. Subsidy is paid with taxpayer’s money. So, why are they hiding the price of products and how the money is administered?  They want to create an avenue for corruption to thrive,” he said.

One of the CEOs, who spoke with THISDAY on the matter, faulted all the components in the PPPRA pricing template, saying that they do not represent the market fundamentals.

“The marketers’ margin is a fraud. Marketers deserve better and they know it. The truth is that the PPPRA pricing template is not transparent. Platts publishes real-time, the prices of products and if you subscribe to it, they will make it available to you. The prices of products are volatile but even when the PPPRA publishes them, they do not update them until after over one month. Now, they do not even want Nigerians to see it so that nobody will know the actual price of products and how much government is paying as subsidy. It is pure corruption,” he said.

One of the marketers also sought for a review of the pricing template and its publication “for Nigerians to see who is getting what” in the PSF fund.

“A review of the template will increase the profit margins of the marketers and protect investments. The cost of doing business is going up but the profit margins are fixed. The problem is that we have a situation where we operate a fixed margin,” he added.

“If your margin is fixed and costs are going up, you will go into the red. The Naira has been devalued and the template does not reflect the current exchange rate and they are hiding it so that there will be all sorts of manipulations that will encourage corruption,” he added.

 

[ThisDay]