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.”