House C’ttee Says Petrol Should Cost N70 per Litre

•  Accuses PPPRA of making consumers incur unnecessary costs

Damilola Oyedele in Abuja

The House of Representatives Ad-hoc Committee on the Review of Pump Price of Petrol, has accused the Petroleum Products Pricing Regulatory Agency (PPPRA) of making Nigerians incur unnecessary costs through its pricing template, and insisted that the pump price of petrol should not be more than N70 per litre.

The committee, at a public hearing monday, said the 84k port charge and the 30k administration charge were fraudulent, particularly as the 84k was for services never provided by the Nigerian Ports Authority (NPA) and the 30k was provided for in the budget of the PPPRA.

The committee members noted that the administrative charge was increased by 100 percent to 30k from 15k after the removal of subsidy in 2016.

In attendance at the hearing were officials of the PPPRA, the Nigerian National Petroleum Corporation (NNPC), the NPA, Major Marketers Association of Nigeria (MOMAN) and labour unions in the petroleum sector.
The Executive Secretary of the PPPRA, Mr. Victor Shidok, said the administrative charge was used to pay for the services of certified cargo inspectors, who are engaged by the agency.

His claim was however countered by the Chairman of the Committee, Hon. Raphael Nnanna Igbokwe, who disclosed that N1.3 billion was budgeted and approved for the PPPRA as cost of hiring six cargo inspectors.
Shidok, however said the budgetary allocation was inadequate for payment of the inspectors, and to take care of other overhead charges.

“The admin charge is to cover their expenses and our staff, whom we send to depots across the country…I still maintain that the 30k charge is to cover our overheads. The N1.3 billion was insufficient to pay the cargo inspectors and also take care of our staff. The admin charge is to augment the budgetary allocation to take care of our overhead operations,” he said.

The committee directed him to provide documents on the total monies collected as admin charge from 2012 – 2016, and since subsidy was removed in 2016, in addition to expenditure of the monies.

Also responding to queries on why locally refined petrol pump price is not cheaper than the imported one since the charges apply to imports, Shidok said the PPPRA set two separate templates with a price range of N140-N145 per litre.

He noted that the NNPC is actually expected to sell below N145 per litre.
Igbokwe however insisted that if the unnecessary costs were removed, Nigerians would not have to pay more than N70 per litre.

“In the 2017 budget, which is before us, PPPRA has a proposal of another N500 million for regulation, monitoring and supply of petrol. This budgetary provisions have already taken care of the purpose for which you charge 30k on the template, yet Nigerians continue to bear the burden by paying N145 per litre,” the Chairman said.
He noted that the 84k per litre port charge, which is meant to be paid to the NPA are for services never provided. These services include port services such as dredging of the ports to accommodate large vessels.

“This has left Nigerians in a situation where they still pay for lightering services for smaller vessels that go to Cotonou or Lome to offload products from mother vessels…but PPPRA will then add the cost to the pump price and ask Nigerians to pay”, Igbokwe lamented.

Representative of the NPA, Mr. Okon Ephraim, in an interesting development, however told the committee that the agency is unaware of the modalities used by the PPPRA, to charge 84k for port charges.
The development led to the committee directing that the Managing Director of the NPA, Ms. Hadiza Bala Usman, appears at its next sitting, which is today.

The Executive Secretary of MOMAN, Mr. Obafemi Olawore, in his submission, said the insistence by the NPA and NIMASA, that importers pay all necessary charges in dollars, has contributed to the strain on the Naira.
He lamented that the NPA’s 84k per litre charge and NIMASA’s 22k per litre harbor charge, are the highest in the sub-region, in addition to multiple levies by the federal and state government agencies.

“The NPA is not helping matters by collecting port dues in dollars. This puts pressure on the Naira. Why can’t we pay with Naira in a Naira economy? A lot of revenue is lost to Lome (Togo), especially when it is true that port dues in Nigeria are the highest along the West Coast of Africa,” he said.

Responding to questions from the committee members, some of the marketers conceded that the pump price of petrol would reduce, if some of the charges built into the template for agencies are removed.
The hearing continues today.