07 March 2017, Sweetcrude, Abuja – The Petroleum Products Pricing Regulatory Agency (PPPRA) has admitted that the agency is having challenges with its products pricing template.
The Acting Executive Secretary of PPPRA, Mr. Victor Shidok, while briefing correspondents in Abuja at the weekend, admitted that the agency was indeed having challenges with the template, explaining that the issue was being addressed by government at different quarters.
“On the issue of the pricing template, we are having challenges. There is nothing hidden. But that is being addressed by government at different quarters,” he assured.
Before now, the PPPRA was constantly updating its daily and monthly pricing template in line with the price modulation system introduced by the Federal Government last year.
The PPPRA daily and monthly pricing template is an information sheet detailing the components used in deriving the PPPRA daily/monthly guiding products prices. It employs Import Parity Principle and this includes; landing cost of products, margins for the marketers, dealers, and transporters, jetty-depot through- put and other charges and taxes.
The objectives of the pricing template are; transparency, full cost recovery, fairness, responsiveness, efficiency and competitiveness.
The PPPRA boss was equally upbeat that the agency has achieved over 75 per cent success in deregulation, stating that it is only petrol that the country was neither here nor there.
“Basically, we may say we have not reached there yet because the ultimate intention is to make sure that we fully deregulate. But then we can say we have achieved more than 75 percent of all the products. It is only one that we can say we are neither here nor there,” he said.
Shidok explained that prior to the establishment of PPPRA, diversion, product adulteration, profiteering and smuggling were the order of the day, a situation that compelled government to set up the PPPRA with the initial mandate of regulating product supply and distribution.
He said there could be hiccups in the supply and distribution of petroleum products, but to have a situation of non-availability of petroleum products in the last 13 years would not be a true assertion because when such situation arises, it is quickly addressed.
“PPPRA has been able to achieve stability in the supply and distribution of petroleum products. Though, in some cases, there are situations when some marketers sell above the regulated pump price too. That sometimes depends on market dynamics.
“When we started the current appropriation for price framework, people were getting it lower than the N145 approved price. So, that is the kind of system we wanted to see playing out in the downstream, even post deregulation,” he explained
Shidok stated that PPPRA would continue to remain relevant even post deregulation because there must be an umpire to ensure that consumers are not shortchanged by marketers that may see the opportunity to profiteer.
“An agency of government must be seen as the entity protecting the interest of all stakeholders involved in the petroleum distribution chain. There could be different models that would evolve when we eventually deregulate because deregulation does not mean when you get a product at N1, you then sell at N150.There must be a regulator. Except we want to promote profiteering, but the agency will be there to check such kind of practices,” he said.