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Chief Executive Officer (CEO) of Oando Supply and Trading Limited, Mr. Dimeji Edwards, has decried the bureaucracy governing the access to the Petroleum Stabilization Fund (PSF) by private sector operators in the downstream sector of the oil and gas industry, saying the trend has contributed to the crisis in the supply of petroleum products to consumers in the country.

The PSF was introduced by the Federal Government in March 2006 to compensate importers of petroleum products for the loss suffered between the landed cost of the products and the regulated sale prices.

However, Edwards said the PSF which could have been effectively utilized as the soft landing of the petroleum products price liberalization policy had failed to meet the objectives of those who conceptualized it.

In a paper: “Importation, refining and the future of Nigerian petroleum products supply” delivered at the Oil Trading Transportation and Logistics (OTL) conference in Lagos recently, Edwards specifically heaped blame on the processes or guidelines governing the access to the fund from the Petroleum Products Pricing and Regulatory Agency (PPPRA) and the Federal Ministry of Finance, describing them as 'cumbersome' especially for private operators.

“The process for receiving the petroleum stabilization fund from the PPPRA through the ministry of finance is cumbersome and subject to delays of up to nine months,” Edwards said.
“It is, therefore, not serving the purpose for the private sector operators,” the Oando CEO added.
He also decried the trend where the NNPC continues to deduct its cost on subsidy at source, before payment to the Federation Account.

Edwards listed some of the problems marring the sector to include: Unclear government tariffs, poor maintenance of assets, inadequate funding, low capacity utilization and frequent breakdown of assets, pipelines ruptures and vandalisation, as well as bureaucracy at relevant government establishments and parastatals.

He said to stem the crisis in the products supply business, more refineries should be built in the country.
According to him, Nigeria would continue to be import dependent, pending when the local refining capacity would be increased to cater effectively for domestic consumption.
Edwards, while urging the government to encourage more private/public partnership in the execution of capital intensive projects in the sector said it was important for all petroleum marketing company to invest in the development of the sector.