• Sat. Jun 10th, 2023

    IPMAN rejects scrapping of Petroleum Equalization Fund in PIB

    The Independent Petroleum Marketers Association of Nigeria (IPMAN) has rejected the proposed scrapping of the Petroleum Equalization Fund (PEF) by the Federal Government.
    The PEF was established with the instrumentation of Decree 9 of 1975 (as amended by Decree Number 32 of 1989 (now Chapter 352 of the Laws of the Federation).
    Its main function was to ensure price uniformity the distribution and supply of petroleum products across the country through the reimbursement of marketers for losses incurred in trucking products from fuel depots to their filling stations throughout Nigeria.
    However, following the decision of the government to introduce the deregulation policy in the downstream sector of the nation’s petroleum industry, fuel subsidy was removed from the pricing template of petroleum products by the Petroleum Products Pricing Regulatory Agency (PPPRA).
    Under the arrangement, the government was removed from playing any role in determining prices of petroleum products while marketers were now free to source of products from wherever they can find and sell at prices determined by market forces of demand and supply.
    However, the IPMAN’s President, Chinedu Okoronkwo, said on Tuesday in Lagos that PEF was still very relevant as the country was progressing towards the full deregulation of the petroleum downstream sector.
    Okoronkwo faulted the recommendations in the draft of the Petroleum Industry Bill currently before the National Assembly from some interest groups for PEF to be scrapped.
    He described such call as uncalled for as the funds employed in making the PEF work effectively were sourced from the revenue pool, generated by the Product Marketing Companies.
    “PEF are fund managers and they manage our money. Government is not giving them money in any way and what they are working with is marketers’ money,” Okoronkwo said:.
    “In order to unite the country, there must be semblance of uniformity in prices of petroleum products all over the country.
    “For instance, the price one buys a particular soft drink is the same all over the country and that is internal equalization by the companies.
    ”So we believe PEF is very relevant and they should continue to do this for the marketers. We are not saying that there should not be a difference in prices. But it should be minimal. “
    He urged the government to create a level playing field in the downstream sector by providing foreign exchange for marketers to import fuel at the same rate given to the Nigerian National Petroleum Corporation (NNPC).
    “We are saying that marketers should be allowed to go out and bring in petroleum products instead of only NNPC importing products.
    “This will encourage competition and drive the price down. There are many areas that cost can go down when marketers are allowed to import.
    “Some marketers already have their own vessels, which may reduce the freight cost. What we want is for government to allow the full deregulation of the sector and allow market forces to determine the price.” (NAN)

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