The PPPRA noted that with the recent plunge in the price of crude oil in the international market, it had observed a downward trend in the expected open market price of PMS
Uche Usim, Abuja
Following media reports that daily subsidy payouts by the government had hit N2.43 billion, the Petroleum Products Pricing Regulatory Agency (PPPRA) on Monday debunked the claims, saying it had not computed subsidy claims since 2015.
The agency in a statement signed by Apollo Kimchi said the Petroleum Support Fund (PSF) Scheme (subsidy) regime ended in December 2015, adding that there was no provision for subsidy in the national budget for 2016, 2017 and 2018.
The PPPRA said it administered the Price Modulation Mechanism (PMM) for the period of January to May, 2016.
The statement reads in part: “Presently, the scheme managed by PPPRA since May 2016 is the Appropriate Pricing Framework (APF). Under this scheme, the Agency regulates petroleum products supply and distribution through issuance of Quantity Notification (QN) and LAYCAN to NNPC and OMCs. It also monitors discharges at various facilities nationwide.
“Due to challenges of Premium Motor Spirit (PMS) pricing in Fourth quarter 2017, OMCs withdrew from importation of the product. NNPC being the supplier of last resort stepped in to bridge the supply gap and has since then ensured adequate supply of the product to meet domestic demand.
“According to NNPC, PMS import price differential resulting in under-recovery is being managed by the Corporation in line with the Act that establishes it. Most of the cargoes brought by NNPC, are under the Direct Sale Direct Purchase (DSDP) contract which is not governed by the PSF regime. It was reported that NNPC withdrawal from NLNG dividend accounts to support the importation of PMS is in public interest.”
The PPPRA noted that with the recent plunge in the price of crude oil in the international market, it had observed a downward trend in the expected open market price of PMS, below the government approved pump price of N145/litre.
“It is expected that over-recovery could be witnessed and if this trend continues, thus will enable other marketers commence importation of PMS (Petrol).
“Government ought to be commended for payment of N236 billion outstanding claims to Oil Marketing Companies (OMCs) and provision made for NNPC under-recovery in the 2019 Budget, measures which guarantee uninterrupted supply and distribution of petroleum products,” it added.
The agency said truck-out figures, showed that the PMS national average daily supply for 2016 and 2017 was around 50 million litres while the estimated average for the year 2018 was about 53 million litres.
“The PPPRA being the commercial regulator of the Nigerian downstream sector has maintained a cordial working relationship with all the relevant government agencies, industry stakeholders and will continue to do same in the discharge of its mandate as enshrined in its enabling law in order to ensure efficiency and effectiveness in the supply and distribution of petroleum products,” it said.