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Major Oil Marketers Association of Nigeria (MOMAN) speaks on the petrol subsidy issue

SUBSIDY FACTS

  1. 90% of petrol consumed in Nigeria is imported due to inadequate and limited local production.

  2. This importation is carried out by Nigerian National Petroleum Corporation (NNPC), Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA), and other independent marketers under permits issued by Petroleum Products Pricing Regulatory Agency (PPPRA).
  3. The PPPRA has a 26 member Board which inter alia includes the Central Bank of Nigeria (CBN), Federal Ministry of Finance (FMF), Nigeria Employers Consultative Association (NECA), Nigeria Labour Congress (NLC), Trade Union Congress (TUC), Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), National Union of Petroleum and National Gas Workers (NUPENG), National Association of Road Transport Owners (NARTO), National Union of Road Transport Workers (NURTW), Nigerian Guild of Editors, National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), MOMAN, DAPPMA, Independent Petroleum Marketers Association of Nigeria (IPMAN), amongst others.
  4. The PPPRA pricing template was established by its Board and was utilised to calculate on a daily basis the landed price of regulated products. This formed the basis of subsidy claims made by participants under the Petroleum Support Fund (PSF) (www.pppra-nigeria.org).
  5. The PSF is funded by the Federation of Nigeria, administered by the PPPRA and supervised by the Ministry of Finance.
  6. The difference between the higher cost of imported PMS as ascertained by PPPRA and the then lower regulated pump price of N65 per litre was the subsidy that was repaid to importers after being subjected to an audit by Government appointed auditors. For example, as at 6 Dec 2011, the total cost of PMS imported product is as detailed below;

    7. Description
    PMS (N/Litre)
    Total Cost of Imported PMS (A)
    N141.38
    Regulated Pump Price (B)
    N65.00
    Subsidy Claim
    N76.38

  7. ANY MEMBER OF THE PUBLIC WHO BOUGHT PETROL OR USED PETROL BOUGHT AT N65 PER LITRE (NOW N97 PER LITRE) BENEFITTED FROM THE PSF AND WAS A BENEFICIARY OF  SUBSIDY.  Our members who participated in the Subsidy Fund were merely claimants who were entitled to reimbursement of costs incurred in the importation and delivery of petrol into Nigeria. Claiming subsidy under the PSF for reimbursement is neither an unwholesome act nor is it illegal.
  8. At inception, participation under the PSF was limited to marketing companies that owned storage of minimum 5,000 metric tons and a network of petrol stations/retail outlets. The PSF was to be funded by contributions of the three tiers of  government during times of under recovery and by funds contributed by the participating marketing companies during  periods of over recovery. For the scheme to work only bona fide companies with meaningful and identifiable assets in the downstream could be held accountable. Unfortunately, a change in the guidelines of the PSF in particular Part V, in 2007,  allowed companies with nothing more than a throughput agreement to operate under the PSF , this saw the emergence of  ‘briefcase’ companies (with no asset base nor accountability) in the PSF scheme.
  9. MOMAN members who have extensive storage and distribution capacity have invested massively in retail distribution infrastructure and assets nationwide, ensuring adequate petroleum products supply to all parts of the Federation and gainful employment for thousands of Nigerians.
  10. RECENT PUBLICATIONS AND STATEMENTS REFERRING TO ALL CLAIMANTS UNDER THE PSF AS MARKETERS AND  ‘CABAL’ ARE FALSE, UNFOUNDED AND WITHOUT ANY MERIT WHATSOEVER

MOMAN has always been a proponent of the total deregulation of the downstream sector and viewed the Subsidy Scheme as an intermediate measure. As responsible entities, we hold efficient utilization of national and corporate resources very dearly.

We welcome any inquiry or investigation into our activities under the PSF which will no doubt establish utmost good faith on the part of our members. FURTHERMORE, MOMAN COMMITS TO PARTICIPATING IN THE PSF ONLY ON THE BASIS OF TOTAL TRANSPARENCY AND ACCOUNTABILITY.

MOMAN is a law abiding body and remains committed to supporting the Nigerian People and the Federal Government in ensuring that petroleum products are made available nationwide.

Signed

Thomas Olawore
Executive Secretary
Major Oil Marketers Association of Nigeria

MOMAN members are Conoil, Forte Oil, Mobil, MRS, Oando and Total

Oando PLC and Oando PLC with Oando PLC, Oando, Oando MOMAN members are Conoil, Forte Oil, Mobil, MRS, Oando and Total, MOMAN members are Conoil, Forte Oil, Mobil, MRS, Oando and Total

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