A Review of the Nigerian Energy Industry

Oil importation: PPPRA demands 80% compliance before payment advice

Oscarline Onwuemenyi

25 January 2013, Sweetcrude, ABUJA – The Petroleum Products Pricing and Regulatory Agency (PPPRA) has warned Oil marketers operating under the PSF Scheme to adhere strictly to the Agency’s Truck-Out directive or forfeit the Sovereign Debt Statement (SDS), the payment advice issued to Marketers by the PPPRA.

Speaking to executives of Nigeria’s oil marketing companies at a Stakeholders’ meeting in Abuja, the Executive Secretary of PPPRA, Mr. Reginald Stanley directed that henceforth, at least 80% truck-out compliance is now a condition precedent for processing the SDS under the PSF Scheme.

To facilitate robust operation, which would further consolidate upon the gains of 2012 policy intervention in the Downstream, Reginald Stanley reiterated that the PPPRA would take all necessary steps to ensure that oil marketers provide unhindered access to Inspectors nominated by the Agency, in addition to providing access for Inspectors to undertake opening and closing tanks dips, as well as opening and closing meter readings at the depots.

According to him, this is in order to further curb incidents of sharp practices by some Marketers.

While reviewing the operational activities of the downstream regulatory Agency in 2012, Reginald Stanley noted that, “Operationally, the year 2012 went well despite the challenges of subsidy removal announced on January 1, 2012, as well as the several appearances at the various investigations and Committee hearings on Subsidy regimes.”

The Executive Secretary stressed that those challenges, rather being inhibitions, actually helped to strengthen both the operations and structure of PPPRA, making it emerge as one of the most productive and result-oriented MDAs in the country.

He however identified a major challenge of 2012 as “the inability to redeem SDS, immediately after the stipulated 45 days, thus impairing Marketers’ capacity to import.”

While announcing that the Agency has successfully conducted a nation-wide stock-taking exercise on January 1, 2013, he warned Marketers that, “The practice of discharging and trucking simultaneously is against established industry practice and henceforth shall attract appropriate sanctions except, where such is required to create ullage in which case conditions for floating operations are met.

He further announced that tracking of IMO number of vessels by Inspectors and the Agency represents additional tool being introduced to check malpractices in the subsector.

The PPPRA’s helmsman also noted the dangers associated with product adulteration, especially as it relates to ATK and condemned such in very strong terms.

He added that the PPPRA shall “henceforth conduct periodic checks on active Tank Farms to ensure that facilities used for back-loading are demobilized at all times, in addition to ensuring Marketers compliance to set guidelines.”

Stanley called on Inspectors to ensure that Marketers are not hoarding products in their tank farm by refusing to truck-out and such should be reported to the Agency for appropriate sanctions.

The Executive Secretary further tasked the petroleum marketers to be proactive and discharge their responsibilities to the nation with total commitment and ensure honesty and transparency, as there will be no space for non performers in the year 2013.

He also commended the efforts of Marketers for the increase in their asset base and improved facilities in the sector.

According to the PPPRA boss, the functionality or otherwise of any Marketer in the year 2013 depends on the assets without which they will not function optimally.

He reminded the Marketers that he ‘foresees more facilities coming up this year and more players coming on board’. He therefore assured them that operational activities in this year would be participatory; noting that any issues that comes up would be attended to promptly.

As part of effort for openness and transparency which the Agency has adopted as its buzz-word, he reeled out the names of Marketing firms that performed above 5o% based on the Agency’s records, while Marketers that performed below the benchmark were given up till February 15, 2013 to deliver their volumes, or stand the risk of being heavily sanctioned. The Executive Secretary reiterated that, the year 2013 would witness zero-tolerant for non-performers.

On the issue of Laycans, Marketers were advised to strictly adhere to allocated Laycans.

The PPPRA explained that, “The whole idea of Laycans is to spread delivery along allowable windows, in order to avoid clogging the system with products, while helping the Agency to situate them”.

He noted that Laycans “is operational and if for any reason any Marketer has issue with the allocated Laycan and feels otherwise, such should always inform the Agency,” he concluded.

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