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Subsidy payment: PPPRA disputes oil marketers’ N70bn claim

By Hector Igbikiowubo
THE Petroleum Products  Pricing and Regulatory Agency (PPPRA) at the weekend disputed claims by petroleum marketers that government owed them an outstanding N70 billion on subsidy payments.

The Agency explained that it had earlier received subsidy claims which amounted to N46 billion, adding that while N14 billion had since been reimbursed, claims of another N10 billion had been audited in line with due process.

In a statement which was signed by Abiodun Ibikunle, the new Executive Secretary, the PPPRA disclosed that the clarification became necessary following series of paid advertisement in some Nigerian newspapers by a group of Marketers, mainly Major Marketers (MOMAN), Independent Marketers (IPMAN), Depot Owners (DAPMAN) and Independent Petroleum Importers (IPPI).

The Agency explained that after obtaining the necessary approvals the N10 billion will also be paid to the marketers, while the other outstanding subsidy claims are being processed for payment.

“The PPPRA notes that the sum of 70 Billion naira as claimed by the Marketers in their publications is not factual. This figure was alleged to include additional cost incurred as a result of bank interests, foreign exchange differentials and other charges, occasioned by delays in reimbursement by Government.  This is obviously far in excess of about 46 Billion Naira claims received by the PPPRA from the Marketers so far in 2009, and for which a part has been paid as earlier stated above.

It would be recalled that following the slump in the international oil prices and the depreciation of the Naira in the last quarter of 2008, Government, after extensive consultations with stakeholders, agreed to mitigate the sudden losses incurred by the Marketers, by reimbursing them with the sum of 17.3 Billion Naira in May, 2009 as foreign exchange differentials on 4th quarter subsidy claims for 2008. It must however be made clear that this gesture by Government was a genuine response to a compelling situation, and should not be construed as a contractual obligation.

However, the PPPRA Pricing Template, which was arrived at by all stakeholders including the Marketers, remains the basis for all the transactions. It should be noted that the template was never static as it is regularly reviewed from time to time to reflect the dynamics of the market.

Government is alive to its obligations and responsibilities regarding the issue of petroleum subsidy as contained in the PSF guidelines. The PPPRA, therefore, wishes to further assure marketers that government remains committed to the payment of all genuine outstanding subsidy claims, but in effecting such payments, it will ensure that due diligence is carried out and the due process is followed.
20th August, 2009,” the statement read.

When contacted at the weekend, spokes persons of petroleum marketers refused to speak, noting that since their position was jointly conveyed, they would rather wait for another meeting to articulate a joint position. The Agency also disclosed that President Umaru Musa Yar’adua recently approved the appointment of Mr. Abiodun Ibikunle as the Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA).

Until his appointment, Mr. Ibikunle was a Deputy Director and Head of the Upstream Division of the Department of Petroleum Resources, DPR. He had previously served as Technical Assistant to both the Presidential Advisers on Petroleum and Energy as well as the Honourable Minister of Energy.

A 1978 graduate of Geology from the University of Ife, Ile-Ife (now Obafemi Awolowo University), the new PPPRA Executive Secretary has attended several courses and developmental programmes both in Nigeria and abroad, and brings to the job an experience spanning about three decades.Mr Abiodun Ibikunle’s appointment as the Executive Secretary of the PPPRA takes effect from July 29, 2009.


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