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FG Creates New Roles For PPPRA

Posted by From Onyebuchi Ezigbo in Abuja on 2005/08/15 | Views: 578 |

FG Creates New Roles For PPPRA


Two key parastatals in the petroleum industry, Dep-artment of Petroleum Resources (DPR) and Petroleum Product Pricing Regulatory Agency (PPPRA) are to under-go some restructuring as part of Federal Government's move to make them conform with their newly assigned functions.

Two key parastatals in the petroleum industry, Department of Petroleum Resources (DPR) and Petroleum Product Pricing Regulatory Agency (PPPRA) are to under-go some restructuring as part of Federal Government's move to make them conform with their newly assigned functions.

PPPRA's Executive Secre-tary, Dr. Oluwole Oluleye, told energy reporters at the weekend that the changes were part of the recommendations by the Committee on Oil and Gas Reforms (OGIC) which is to be tabled before the National Assembly for assent.

Under the review, PPPRA would have its name changed to Petroleum Product Distribution Agency (PPDA) while DPR is to become Petroleum Inspec-torate Department, both operating as arms of the Ministry of Petroleum Resources.
The restructuring of both agencies is to create distinct roles based on the government's present aspiration in the oil and gas sector.

Experts in the oil industry are of the opinion that the agencies sometimes have inter-related functions which cause confusion and improper execution of government policies.

For instance, while DPR is saddled with the responsibility of inspecting and monitoring the operations in upstream and downstream sectors of the oil and gas industry, agencies like the PPPRA also finds itself involved in similar role with regards to monitoring the supply and distribution of petroleum products in the domestic market.

Oluleye said government's intention was to redirect the focus of PPPRA from its price fixing role and make it concentrate more on other issues relating to product distribution in the downstream area of the petroleum sector.

Among the key functions spelt out in the law setting up PPPRA are to determine the pricing policy of petroleum products, to moderate the volatility of product prices, while ensuring reasonable returns to operators.

Oluleye, however, said there is need to move the organisation away from the perception of a price regulator which by virtue of the existing deregulation policy is a misnormer.

"The term 'price regulatory agency' has given members of the public the wrong notion that the organisation was mainly established to fix or regulate petroleum prices in the downstream sector", he said.

He said PPPRA intends as from January next year to focus mainly on how to maintain stability and efficiency in the supply and distribution of petroleum products throughout the country.

The PPPRA scribe said the agency also hopes to establish parameters and codes of conduct to guide all operators in the downstream sector.

Issues such as maintaining adequate storage facilities, distribution outlets as well as monitoring the operators to comply with safety standards in the industry will henceforth be the focus of the agency, he said.

Meanwhile, Oluleye also yesterday said as a result of high cost of crude, pump price of petrol "should be between N71 and N75 per litre."

He made the declaration at an interactive session with stakeholders and newsmen in Kaduna at the weekend.

"A metric tonne of petrol is 613 dollars as of today, higher than 293 dollars when the deregulation commenced in October 2003," he said.

According to him, landing cost is now N65:26k per litre since the beginning of this month, "while it was only N33 in October 2003."
He said the high cost of crude was impacting negatively on the pump price leading to non-recovery of cost by the marketers.

"There must be recovery of cost at the pump in the interest of all," he said.
Oluleye said a slight increase was far better than shortage and chaos at the petrol stations.

He said a solution to the low cost of petrol must be proffered since nobody would want the nation to go back to shortage and chaos at the filling stations.

He said budgetary provision for fuel subsidy would go a long way to settle the problem of pump price increases.
Cost of crude oil had gone up consistently in the last seven months with a barrel selling at between 63 dollars and 66 dollars, the highest ever.
The ES said inappropriate pricing and price volatility remained the challenges of deregulation.

He said establishment of refineries would assist in stabilising price volatility, but added that that could only come on board when there was appropriate pricing.

He praised the media for its role in educating Nigerians on the merits of the deregulation policy since inception.

Oluleye appealed to Nigerians to support the agency to arrive at a reasonable and appropriate pump price of petrol.

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