PPPRA faults marketers’ claims on subsidy
BY VICTOR AHIUMA-YOUNG
Petroleum Products Pricing and Regulatory Agency (PPPRA) has faulted claims by Petroleum Products marketers that the agency calculates its subsidy payments, based on $152 instead of the current exchange rate of between $156 -$158, which is allegedly making importation of products difficult.
The agency said the average exchange rate it used for the last five months in tandem with the Central Bank’s Forex rates are “January 2011 – $152.98, February – $153.43, March – $153.86, April – $155.42 and May month end – $156.32.”
Managing Director of Mobil Oil Nigeria MON, Plc, Mr. Adetunji Oyebanji, was reported to have said that his company had to sack workers in order to reduce the cost of operations, as a result of the pricing template of the PPPRA.
Oyebanji was also quoted to have called for urgent review of the template to increase the profit margins of Marketers and also reflect the current exchange rate, adding the PPPRA calculates its subsidy payments, based on $152 instead of the current exchange rate of between $156 -$158.
PPPRA in a statement by Lanre Oladele on behalf of the management of PPPRA stated: “As a responsible Agency of government, we hereby wish to affirm unequivocally that these claims are incorrect and misleading. Marketers are merely hiding under this pretext as an excuse to demand for margin increment, knowing that the PPPRA uses the prevailing exchange rate, as released by the Central Bank, in all its transactions.
The exchange rate applied daily by the PPPRA is as dynamic as the Forex market, while the market as we all know, responds to international market realities. Prices are therefore calculated, based on current market values as published by the Central Bank of Nigeria on a daily basis. The average exchange rate used by the Agency for the last five months in tandem with the Central Bank’s Forex rates are as follows: January 2011 – $152.98, February – $153.43, March – $153.86, April – $155.42 and May month end – $156.32.”
“The claims of Marketers are therefore baseless, as there has never been a time the Agency shortchanged any Marketer or reduced their subsidy claims due to miscalculations. It should also be added that even if the recent upward review of margin for NARTO had been responsible for this clamour, Mobil, as an important stakeholder in the downstream sector, should be able to pursue its interests and concerns within established structures that address issues such as this.
The PPPRA would like to reiterate the need for Marketers of petroleum products to avoid making sweeping statements that can cause schism in the sensitive downstream sector. The current level of product availability and the improved performance of the Petroleum Support Fund should be sustained by all concerned in the interest of consumers and the nation.”