Monday 4 January 2016

"New petrol price template not transparent" - NLC

Nigeria Labour Congress
The Nigeria Labour Congress on Sunday stated that the new petrol template, released by the Petroleum Products Pricing Regulatory Agency on Saturday, was not transparently done.

The General Secretary of NLC, Dr. Peter Ozo-Eson, told our correspondent on the telephone that the Federal Government arrived at the figures without adhering to the law guiding the exercise.

The Federal Government had, on Saturday, officially ended the subsidy on premium motor spirit, popularly known as petrol.

The PPPRA in the new template, states that the Estimated Open Market Price of petrol is N84.78 for the Nigerian National Petroleum Corporation’s filling stations and N85.1 for the ones run by oil marketers.

The EOMP is the total landing cost of petrol and sub-total margins. Such margins include transporter’s cost, dealer’s charge, bridging fund, administrative charge etc. The EOMP, therefore, is the true cost of the product.

As of December 28 last year, the official pricing template for petrol by the PPPRA showed that the Federal Government subsidised the product by N6.45 per litre.

The Expected Open Market Price at that time was N93.45, which was N6.45 higher than the then retail price of N87 per litre.

Before the revised template was released, the EOMP was usually higher than the retail/pump price of petrol at filling stations.

The difference between the retail price and the EOMP was what the Federal Government paid as subsidy to oil marketers.

However, the new EOMP is lower than the retail price of N86.5, which was set by the Federal Government as the amount at which petrol should be sold nationwide.

The implication is that Nigerians are paying an extra N1.4 for the commodity whenever they buy PMS at non-NNPC run petrol stations and N1.22 extra for every litre of petrol bought at NNPC-run stations.

Ozo-Eson said the process was flawed, arguing that it was carried out as if there was a deliberate plot to confuse Nigerians in order to increase the pump price in the future.

Ozo-Eson, who also commented on the difference of N1.4 per litre imposed on every Nigerian user of petrol, called for transparency in the management of the fund.

He said by the imposition of an additional N1.4, it meant that Nigerians were being made to pay a petroleum tax.

The general secretary said the process should have been transparently executed with the constitution of the PPPRA Board empowered by the laws of the land to fix prices for petroleum products.
He added, “We need to be careful, you see, in the release that we issued, I pointed out the important of the process. The law specifies that PPPRA board should be constituted to recommend the price.
“The board is not a government appointed board. It comprises all the stakeholders. You cannot be talking of a template now. Which template are you referring to? Is the template the outcome of the PPPRA. The law was careful to ensure that we have all stakeholders represented in the PPRA board.
“The legal position is that the board would be engaged. You cannot talk about the template, without this board. When the President and I visited the minister, we told the minister that there was need to convene the PPRA board.
“People will use this thing to suck them in a situation that tomorrow when prices escalates, there would be a precedent.
“The PPPRA is a stakeholder-based organisation by law. It is now a government-appointed PPPRA. The figures should have been done with all the stakeholders.
“They owe Nigerians a duty to account for it so that we are sure that the revenue is properly accounted. They should do it in an open and transparent way, but now they are doing conflicting things, as if they are planning to confuse Nigerians to increase fuel pump price.”
The Group General Manager, Corporate Planning and Strategy, NNPC, Mr. Bello Rabiu, while explaining the template, told our correspondent that the negative subsidy would be remitted to the Petroleum Support Fund in line with the PPPRA guidelines.
He said, “The savings under such a regime could be domiciled in the PSF as a buffer to fund future subsidy (if any) that may arise during high oil price regime or invested by the industry in supply and distribution efficiency improvement projects such as decongestion of Apapa area, Single Point Monitoring in Port Harcourt and Warri, complementary rail services, inland waterways, etc.”

Credit: Punch

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