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Written by victor Ahiuma-Young
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THERE are indications that the Nigerian National Petroleum Corporation (NNPC) and major marketers collected a whopping N38.88 billion from the Petroleum Products Pricing and Regulatory Agency (PPPRA) for pipeline maintenance between March 2007 and June 2008 when products were distributed nationwide by trucks, 100 per cent of the time.
The Presidential Steering Committee on the Deregulation of Downstream Sector of the Petroleum Industry headed by the Governor Isa Yuguda of Bauchi State with Governor Adams Oshiomhole of Edo State as member which discovered the irregularity has ordered that the money be returned to the Petroleum Equalisation Fund (PEF).
Vanguard investigations revealed that while the NNPC collected N29.1 billion, major marketers collected N9.7 billion for the purpose.
Further investigations revealed that at one of the meetings of the committee in mid-March, a four-man sub-committee was set up to verify claims of N2 per litre of petrol charge on pipeline maintenance as the pipelines were reportedly not being used.
In the course of further investigations, it was gathered that the sub-committee visited and interrogated officials of the NNPC and PPPRA and turned in its report on Tuesday, March 31.
An official who spoke on condition of anonymity said: “The findings of the sub-committee discovered that the N2 per litre pipeline charge was introduced into the PPPRA template in March 2007. Based on the information made available by the PPPRA through its pricing template and NNPC, all marketers and NNPC collected the N2 per litre pipeline margin between March 2007 and June 2008 because it was included in the ex-depot price.
From the calculation of the committee, this amounted to a whopping N38.88 billion for Premium Motor Spirit (PMS), otherwise known as petrol, alone.”
The finding also revealed that further reviews of the application of N2 per lite charge for pipeline maintenance led to dividing it into a fixed charge of N0.50 per litre and N1.50 per litre variable components. Following the report of a committee on review of Downstream Petroleum Industry Operation in February 2008, it was decided that the application of the N2 per litre as a maintenance charge would require evidence with regard to the use of the pipelines.
But the eligibility for the N0.50 fixed charge element does not require such proof. This led the PPPRA to remove pipeline margin from the pricing template in July 2008 because of a new policy of marketer segmentation of margins.
So, since July 2008, no payments have been made to either NNPC or Marketers as pipeline charge because both NNPC and marketers have not been able to show proof of pipeline usage.”
Vanguard’s investigation revealed that the NNPC, notwithstanding, put up spirited defense that it had been using its pipelines for products distribution and that there was evidence to that effect and insisted that various segments of its network of pipelines had always been and would always be used.
Furthermore, the official disclosed that the finding of the sub-committee shows that “as at the time that the pipeline margin was introduced in March 2007, there was no clear guideline as to the pre-conditions for eligibility for claiming the charge. The amount (N2 per litre) pipeline charge was consequently universally applied.
When the charge for pipeline maintenance was being applied, there was well an additional charge of N2 per litre for Bridging Fund (Petroleum Equalisation Fund). The bridging is the average cost of transporting petroleum products beyond 450 kilometres from one depot to another. The logic of the payment for two logistic facilities that are mutually exclusive is not entirely clear.”
Efforts to reach Mrs. Funke Kasali, Executive Secretary of the PEF for her reaction to the development proved abortive at the time of filing this report.
The official told Vanguard that the Yuguda committee was shocked by the findings and had told the NNPC and the marketers that they have to refund the money.
Vanguard investigations revealed that this finding may have been part of many irregularities committed during the administration of the former Executive Secretary of PPPRA.
Vanguard Newspapers
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