Financial Energy Review
An industry expert, in the down stream petroleum sector, Ms Ronke Onadeko, has said that the Petroleum Products Pricing Regulatory Agency (PPPRA), should review the policy on fuel pricing modulation in the country.
Onadeko gave the advice at a virtual workshop for journalists on the oil sector reforms in Abuja.
The Agency had adopted a monthly pricing modulation style that reflected the global oil market fundamental to determine the price of products in the country.
She said the agency should have a short, medium and long term plan of pricing modulation of petroleum products to ensure transparency in price fixing.
According to her, stakeholders of the industry need to understand the pattern and style of the agency in regulating the sector.
This, she said, would eliminate the non compliance with regulations, especially when oil prices dropped as it was happening currently with the COVID-19 Pandemic.
She added that PPPRA should also let people know the landing cost and exchange rate policy at which it pegged its pricing modulation.
“There is need for the agency to be firm and focussed in the pricing modulation to enable everyone participate and comply when necessary,’’ she said.
On incorporating the Artisanal Refining (Illegal) community to the formal sector, she said the government must look at the whole situation and see how profitable it would be to the economy.
It will be recalled that the Federal Government had agreed to incorporate the artisanal refiners into the formal oil refining system.
The agreement was made at the end of the Consultative meeting between federal government and Association of Artisanal local Refineries Operators in Nigeria.
The meeting was anchored by the office of the Senior Special Assistant to the president on Niger Delta Affairs.
She noted that most of the crude refined by the group was stolen from vandalised pipelines or cargos.
According to her, if government is going to incorporate them into the formal sector, they should be able to add effectively to the revenue of the country.
“I know that there is an informal indigenous refining community and I know that it seems to be profitable but I have never done the calculation.
“But one thing I know for sure is that they do not buy the crude oil they are refining. So, if you are getting the crude oil for free and you are refining and making a profit, if you now properly have to pay for oil, will you still be making a profit,’’ she noted.
She said incorporating the group meant that they should be made to buy their crude and also pay taxes.
“Immediately they go into the formal sector, first of all, they have to pay for the crude and start paying taxes, then we will have regulations and how to dispose the waste, how they move cargoes among others.
“If they include all of these cost into whatever they are doing, will they remain profitable? That is what I need to know before I take a position.
“Because if they are not going to be profitable, what is the value they are going to bring to the table?” she asked.
She said the government must ensure that everything necessary was done before bringing them into the formal oil refining sector.
