The proposal by the draft of the Petroleum Industry Bill (PIB) to scrap the Petroleum Equalisation Fund (PEF) has come under attack by the Independent Petroleum Marketers Association of Nigeria (IPMAN).
IPMAN’s President, Chinedu Okoronkwo, said this on Tuesday in Lagos, that PEF was very relevant as the country was progressing towards the full deregulation of the petroleum downstream sector.
PEF was set up by Decree 9 of 1975 (as amended by Decree Number 32 of 1989 now chapter 352 of the Laws of the Federation).
Its main function is to ensure price uniformity of petroleum products via the reimbursement of marketers for losses they incur in trucking products from depots to their filling stations anywhere in Nigeria.
Okoronkwo faulted the recommendations from some stakeholders that the PEF should be scrapped in the draft of the Petroleum Industry Bill currently before the National Assembly.
He noted that this was 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.
“In order to unite the country, there must be semblance of uniformity in prices of petroleum products all over.
“For instance, the price you buy a particular soft drink is the same all over the country and that is internal equalisation by the companies.
”So, we believe PEF is very relevant and they should continue to do this for us. We are not saying that there should not be a difference in prices but it should be minimal. “
He also 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 petrol instead of only NNPC importing the product.
“This will encourage competition and drive the price down. There are many areas that cost can go down when we 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.”