ABUJA –  The Federal government disclosed that it spent over N2.7 trillion on subsidy for importation petroleum products into the country from 2006 till date.

Of this figure, more than N1.3 trillion was paid to the Nigerian National Petroleum Corporation, NNPC, while the balance of more than N751.5 billion was paid to other marketers within this period.

The Executive Secretary of the Petroleum Products Pricing Regulatory Agency, PPPRA, Mr. Abiodun Ibikunle, who made the disclosure during a media briefing in Abuja, also stressed that the current hike in the prices of petroleum products in the international market would not affect local prices.

According to him, “Nigerians should be rest assured that all efforts are on to ensure the relative stability that the country has enjoyed in the prices of petroleum products and the present hike in international oil prices would not necessarily impact our local market.”

He noted that since the commencement of the partial deregulation of the downstream sector in September 2003, the economy has recorded tremendous improvements in the areas of product availability across the country, the infusion of private investment in storage facilities and products haulage, and the creation of level playing field in the sector.

He argued that the Petroleum Support Fund, PSF, introduced by the Federal government in 2006, has effectively ensured the stability of products prices, adding that more than N2.3 trillion was expended for the payment of subsidy to oil marketers.

Ibikunle explained that the PSF was introduced as an interventionist fund to mitigate the volatility of the crude oil prices in the international market.

“The Federal Government introduced this scheme as a measure to ameliorate the impact of the upward swings in products prices on the consuming public, and since 2006 it has helped government to manage the effects of volatility in the international crude oil prices and thereby stabilise domestic prices.”

He added that “prior to the introduction of the scheme, the country witnessed rapid increases in the prices of petroleum products; this imposed a lot of hardship on the populace and elicited a lot stiff opposition from the people.”

According to Ibikunle, “The implementation of the PSF scheme has been fraught with a number of challenges but with the support of the Federal Government, we have been able to surmount these challenges and we will continue to put measures in place to have effective control of the operations of the scheme.”

The guidelines for the implementation of the PSF, he explained, was prepared by the PPPRA after due consultation with industry operators and stakeholders.

Ibikunle stressed that the process of subsidy re-imbursement to participants of the PSF, “follows a rigorous procedure that discourages any possibility of collusion, products diversion, smuggling or any other sharp practices.”

He added that the Agency as presently constituted is not empowered to sanction erring petroleum marketers in operational issues. “However, the Agency has sufficiently installed a system that monitors the supply and distribution of petroleum products under the PSF scheme.”