The Department of State Services (DSS) may have taken over the job of monitoring downstream petroleum distribution and marketing, as part of President Muhamadu Buhari’s measures to stem the high level of corruption in subsidy claims.
Consequently, fuel stations selling any petroleum product above the prescribed government price may be shut down immediately, while any depot selling above the ex-depot price will have to forfeit the subsidy claims on the cargo that brought in the product.
The Department of Petroleum Resources (DPR) has scheduled another impromptu closed door meeting with marketers and other industry stakeholders (Wednesday) at its Headquarters in Lagos to update them on the new development.
Confirming the Wednesday meeting, a top industry source said in a telephone interview that the decision was made known to stakeholders at a closed door meeting in Abuja on Monday.
“DSS will lead the operations (monitoring) and marketers were also asked to monitor each other and report any sharp practices.
“Government decided that enough was enough and will no longer condone any sharp practices in the system,” a source said in confidence.
The source disclosed that the meeting was called by Federal Government and had in attendance the representatives of the DSS, DPR, PPPRA, Major and independent marketers, depot operators and a host of other industry operators.
The participants deliberated on the best way to arrest the unofficial price hike of petroleum products in the market, due to supply shortages following the inability of the government to pay marketers’ outstanding subsidy claims of over N200 billion.
Unofficial price hike
Enquiries arose about the cause of the sudden unofficial hike of both the pump price and ex-depot price of premium motor spirit (PMS), popularly called petrol and kerosene and the helplessness of the industry regulators to arrest the situation.
Since the supply shortages set in some months ago, marketers and depot operators illegally hiked pump and ex-depot prices for enormous profit while waiting for government to pay off their outstanding claims.
As a result, practically every retail outlet sold petrol above the official N87/litre to peg price at between N100 and N150/litre depending on the outlet and location.
Similarly, rather than the prescribed N81/litre ex-depot price, marketers accused the depot operators of selling at N96/litre instead, which they claimed forced them to also hike pump price.
“Such practices will no longer be condoned especially with the involvement of the DSS, who will use their intelligence network to get to the root of the matter.
“The meeting decided that all marketers must sell at the regulated price of N87/litre of petrol. And anyone found to be selling above this, the DSS will track the outlet to the depot where the product was lifted.
“If it was discovered that the pump price increase is a result of hike in ex-depot price, then both the outlet and the depot will be sanctioned.
“Originally, it was agreed that both the outlet and the depot will be shut down, but after considering the situation, it was agreed that the depot will not be shut down in order not to exacerbate the supply shortage.
“However, the depot operator will be made to forfeit his subsidy claims on that cargo, as it will be assumed that he has reimbursed himself through the ex-depot price hike.
“We are meeting with DPR again (today) on the same matter for them to tell everybody what is happening and the need for all to ensure compliance,” the source added.
DPR meets stakeholders
Expressing shock at the takeover of parts of its functions by the DSS, a top management official of DPR confirmed the upcoming meeting with stakeholders in Lagos today.
The official, who also spoke in confidence in a telephone interview said: “The Downstream Unit only informed us about the meeting holding (today) at about 4p.m.”
He expressed shock that the Unit did not give them full disclosures on the reasons for the impromptu meeting saying: “It is sad that everybody now does territorial claim when the whole roof is caving in. If there are new developments we should know firsthand and not from a third party.”
Agreeing that the DPR was overwhelmed by the sharp practices in the industry, he asked: “How can we effectively monitor a situation where the marketer shows us technical proof about the depots selling above the ex-depot price, and the depot operators in turn show proof at selling under the regulated price
“We heard their accusations back and forth, and decided to hold an impromptu meeting with them in Lagos a few weeks ago. Since it was an open meeting, we expected the parties to openly make their allegations. But nobody did. So how can we hold anybody responsible?”
He added that the involvement of the DSS was a welcome development as long as it will bring sanity to the system, seeing that DPR lacked the capacity to fully monitor downstream operations.
The move followed the apparent inability of the industry regulators, the Department of Petroleum Resources (DPR) and the Petroleum Products Pricing Regulatory Agency (PPPRA), whose officials were apparently overwhelmed by the supply shortages to check sharp practices and market excesses among the operators.