IPMAN Kicks Against Scrapping Petroleum Equalisation Fund

The Independent Petroleum Marketers Association of Nigeria
(IPMAN) has rejected the proposed scrapping of the Petroleum
Equalisation Fund (PEF).

Chinedu Okoronkwo, IPMAN’s president, told NAN on Tuesday that
PEF is very relevant especially as the country is progressing
towards the full deregulation of the petroleum downstream
sector.

NAN reports that PEF was set up by decree 9 of 1975 (as amended
by Decree Number 32 of 1989 now chapter 352 of the Laws of the
Federation).

Its main function is to ensure price uniformity of petroleum
products via the reimbursement of marketers for losses they incur
in trucking products from depots to their filling stations anywhere
in the country.

Okoronkwo faulted the recommendations from some stakeholders
that the PEF should be scrapped in the draft of the petroleum
industry bill currently before the national assembly.

He noted that this was uncalled for as the funds employed in
making the PEF work effectively were sourced from the revenue pool,
generated by the product marketing companies.

“PEF are fund managers and they manage our money. The government
is not giving them money in any way and what they are working with
is marketers’ money,” he said.

“In order to unite the country, there must be a semblance of
uniformity in prices of petroleum products all over.

“For instance, the price you buy a particular soft drink is the
same all over the country and that is internal equalisation by the
companies.

“So, we believe PEF is very relevant and they should continue to
do this for us. We are not saying that there should not be a
difference in prices but it should be minimal.”

He also urged the government to create a level playing field in
the downstream sector by providing foreign exchange for marketers
to import fuel at the same rate given to the Nigerian National
Petroleum Corporation.

“This will encourage competition and drive the price down. There
are many areas that cost can go down when we are allowed to
import,” Okoronkwo explained.

“Some marketers already have their own vessels which may reduce
the freight cost. What we want is for government to allow the full
deregulation of the sector and allow market forces to determine the
price.”

The Independent Petroleum Marketers Association of Nigeria
(IPMAN) has rejected the proposed scrapping of the Petroleum
Equalisation Fund (PEF).

Chinedu Okoronkwo, IPMAN’s president, told NAN on Tuesday that
PEF is very relevant especially as the country is progressing
towards the full deregulation of the petroleum downstream
sector.

NAN reports that PEF was set up by decree 9 of 1975 (as amended
by Decree Number 32 of 1989 now chapter 352 of the Laws of the
Federation).

Its main function is to ensure price uniformity of petroleum
products via the reimbursement of marketers for losses they incur
in trucking products from depots to their filling stations anywhere
in the country.

Okoronkwo faulted the recommendations from some stakeholders
that the PEF should be scrapped in the draft of the petroleum
industry bill currently before the national assembly.

He noted that this was uncalled for as the funds employed in
making the PEF work effectively were sourced from the revenue pool,
generated by the product marketing companies.

“PEF are fund managers and they manage our money. The government
is not giving them money in any way and what they are working with
is marketers’ money,” he said.

“In order to unite the country, there must be a semblance of
uniformity in prices of petroleum products all over.

“For instance, the price you buy a particular soft drink is the
same all over the country and that is internal equalisation by the
companies.

“So, we believe PEF is very relevant and they should continue to
do this for us. We are not saying that there should not be a
difference in prices but it should be minimal.”

He also urged the government to create a level playing field in
the downstream sector by providing foreign exchange for marketers
to import fuel at the same rate given to the Nigerian National
Petroleum Corporation.

“This will encourage competition and drive the price down. There
are many areas that cost can go down when we are allowed to
import,” Okoronkwo explained.

“Some marketers already have their own vessels which may reduce
the freight cost. What we want is for government to allow the full
deregulation of the sector and allow market forces to determine the
price.”