Tag: PPPRA

For the Petroleum Products Pricing Regulatory Agency, PPPRA, under the current leadership which just marked one year in office last month, the last two weeks can be said to be its own baptism of fire by the media.

For right or wrong reasons, every organization, especially those in the public eye, often have their day in the media court. And since the journalism is history written in a hurry, many at times many organisations get undeservedly seriously bruised even without having the privilege of turning in all the facts of their case. Some others get their just dessert and the deserved knocks and go home sulking and sad thereafter.

Two weeks ago, the chief executive of the agency and his team came calling at the National Assembly to honour the invitation of the Joint Committee of the Senate and House of Representatives on Petroleum (Downstream) to defend the budget of the agency.

It was in the course of handling this important task that something went the unexpected way. The whole drama centred on how much accrued to the agency through its internally generated revenue and the use to which it was put. The PPPRA boss had informed the law makers about the N5.7 billion that was generated and listed the sub heads under which the fund was expended in line with what was approved by the Budget Office for its 2012 overheads and personnel.

In the spirit of true democratic practice and wanting to asset its authority, the legislators had reaffirmed the role of the legislature in respect of appropriation and proceeded to warn sternly that the MDAs have no power to expend any fund without the legislature appropriating it. The PPPRA boss was invited for a second session the following day and the law makers’ day’s job was done.

It was from here the media took over. The following day the media was awash with screaming headlines on how N5.7 billion was blown on staff, as one newspaper noted in its headline. Days later, some newspapers, drawing from the drama on the floor of the House and the sensational report of the event by their correspondents, took position, in editorials, calling on authorities to scrap PPPRA.

Indeed a sober study and analysis of the encounter will bring out two salient facts. One, what the law makers were after that day was to establish their authority, perhaps rightly, that by law, the role of the legislature to appropriate is sacrosanct and cannot be compromised; two, it was never in dispute that the sum of N5.7 billion was appropriated for overheads and personnel for the agency in the 2012 Budget. What was in contention was where the fund was sourced from.

For any discerning analyst, it may not be too far to see that this may just have been much noise over little or nothing.

Contrary to the impression created about a major secret deal blown up, the overheads and personnel cost of the agency (not salary and allowances alone) went through the rigour of budge scrutiny and was duly appropriated. At no time during the session did the law makers describe the salary and allowances of PPPRA as something they were getting to know for the first time.

And contrary to the submission of N5.7 billion divided by 249 members of staff, that appropriation was for both personnel and overheads such as expenses incurred in its operations duly vetted by the budget office.

Indeed, little effort at information gathering would have shown that what PPPRA officials earn is not different, or rather similar to what obtains in other agencies of government in the oil and gas industry such as Nigeria Petroleum Development Trust Fund NPDTF, Petroleum Equalization Trust Fund PETF, Petroleum Products and Marketing Company, PPMC, among others.

Indeed, it is because of this standard salary structure that staffers of one of the agencies are routinely transferred to others as the situation requires without such workers feeling shortchanged, or unduly favoured.

The agency’s Chief Executive, Reginald Stanley had cause to correct the wrong impression of a jumbo salary at PPPRA days later, describing it as a gross misrepresentation of what he said while appearing before the august committee.

He said the sum of N5.7billion, when broken down into sub-heads, actually accounted for staff salaries and allowances, National Contributory Pension, Pension Payments, National Health Insurance Scheme, Pay-As-You-Earn tax element, overheads, and other sundry deductions, consistent with what obtains in other MDAs, especially in the Oil and Gas Sub-sector. He added that ‘PPPRA does not operate a peculiar salary structure independent of what obtains in other sister organizations within the oil and gas sub-sector. We are fully aligned with other organizations on what we earn. We receive budgetary allocations on yearly basis, like others, and we account for every kobo spent, in the spirit of transparency and accountability, all for the good of our country.’

Downstream oil sector analysts will readily attest to the efforts PPPRA has put into the works of sanitizing that sub sector of the oil industry in the last one year. Records clearly show that owing to some stringent measures put in place by the new leadership, PPPRA has brought down payment on subsidy by 49.7 per cent in 10 months when what was paid between January and October this year is compared to what was paid during the same period in 2011.

While the federal government paid N1.351 trillion as subsidy between January and October 2011, what was paid during the same period this year came to N679 billion, with NNPC receiving N337.7 billion while other marketers received a combined figure of N342 billion. With this feat, the agency has been able to save some N671 billion in 10 months for the nation.

Of course, anyone familiar with this industry will testify to the fact that bringing this about took some efforts. Since November 2011 when the Stanley led team took over with a clear mandate by the supervising ministry to restore sanity to petroleum products importation business, the team has hit the ground running and it has not looked back. Indeed, the first step he took which gave a clear signal that he meant business was the pruning down of the oil importing and trading companies licensed to import products from an all- comers and unwieldy 126 to 42 by the first quarter of this year.

Not just that the figure has today been brought down to a manageable 39, stringent measures and regulations have been put in place to enthrone transparency, accountability and quality service delivery.

A few of these measures will suffice in this analysis. One of the earlier measures taken by the agency was the restriction of participation in fuel importation to only owners of coastal discharge/depots facilities, thus reducing participation in the PSF Scheme to only genuine and capable marketers. This move has achieved an added advantage of motivating more investments in the development of petroleum handling facilities, thereby promoting local content development ensuring better management of participants in the PSF scheme.

To enthrone transparency in the scheme, a number of measures were put in place, which today the nation is benefitting from remarkably. They include: the introduction of certified cargo inspectors to enhance operational efficiency and accountability in the areas of products receipts, in line with international best practices; introduction of Double-Three-Two (3-3-2) inspector system to monitor product imports. With this, three inspectors nominated by the agency will confirm vessel arrival quantities; three inspectors will confirm vessel discharge qualities, while two other inspectors will confirm the qualities physically trucked–out of the depots. Taking physical control of discharge values at depots is another initiative that has helped to eliminate risks of Back-loading activities.

The Agency has also tightened requirements for import documents such as Letter of Credit, Bill of Lading, Form M, DPR License, Shore Tank Certificates etc thereby eliminating risks of Bill of Lading manipulation and ensuring integrity of products discharge data to justify subsidy payments.

To battle the evil of round tripping, the Agency imposed a ban on cargo from storage tanks in West African coasts, except from refineries and blending plants; it also imposed a similar ban of ‘homogenized cargo’ in further pursuit of its war against round tripping.

The Agency hit the bull’s eye in July when it subscribed to Llyod’s List of Intelligence Sea Searcher services, for tracking vessels movements around the world. This is to determine the true origin as well as monitor vessels movement right from take off until they berth on the nation’s shores. Industry watchers described the measure as master stroke in the battle to sanitize the industry.

More interesting is the fact that the agency obtained NNPC’s commitments to comply with all the measures and requirements for PSF processing just like all other marketers.

•Yakubu wrote in from Lagos