Group Kicks against Scrapping Petroleum Equalisation Fund

The alleged plan by the federal government to scrap the Petroleum Equalisation Fund (PEF) has been condemned by a socio-cultural group, United for a Better Nigeria (UFBN), on the grounds that it would cause more hardship for Nigerians.

The chairman of the group, Olumide Mayowa, said at a forum organised by oil marketers in Abuja that if the government decided to get rid of the services of PEF, it would affect the price of petroleum products, as well as that of foodstuffs and other items used by average Nigerians.

Mayowa said PEF had been of immense assistance to all Nigerians, adding that the transport and bridging claims paid to transporters for the movement of products across the country has made the cost of petroleum products almost the same no matter the location.

He added that a removal of such bridging measures would mean that marketers would have to factor such products’ transportation costs into pump prices of products at service stations. “If you scrap PEF and it means total deregulation and transporters will have no choice but to transfer the cost of the movement of products to the consumers and that will be unfortunate. I tell you that the least a litre of petrol will cost when total deregulation is implemented will be N250 per litre in cities like Abuja and N350 per litre for Maiduguri and other towns in the far North,” Mayowa said.

He further asked: “Do you deregulate to limit your own people?’’ and wondered why there are reported agitations to get rid of PEF since the pipelines and the rail lines across the country are not functional”.

According to him, “Even if they are functional, what security guarantees are there to ensure that products get to their destinations without militants and other restive groups blowing up the pipelines or cause train accidents.

“I heard that the Independent Petroleum Marketers have set up a task force that will ensure the safety of products being piped and I am wondering what they hope to achieve considering the fact that almost all the security agencies have been experiencing an uphill task in efforts to achieve the same feat. For us the best thing is for the government to strengthen PEF for it to function better. It took six weeks to complete a 3.6 kilometer runway at Abuja international airport. I wonder how many years it will take to fix the hundreds of kilometers of rail lines and secure hundreds of kilometers of pipelines for the movement of products,” he explained.

He also added that road transport will continue to be the only means for distributing petroleum products to some states in the far North because there are no pipeline linking Sokoto State and Borno State.

“As you know the only loading areas in Nigeria are in Lagos, Port Harcourt and Calabar. Without loading and transporting by road how will people in the far North receive supply of petroleum products? Apart from that PEF is the only organisation that keeps accurate and up-to-date records of all loadings across the country, coupled with the fact that the agency provides information about the smuggling of products across the borders,” he said.

“Government should not forget that the attempt at full deregulation soon after this administration assumed office led to increase in the pump price of petrol. That should serve as a lesson while raising issues on the desirability or not of PEF. I do not think it is necessary to touch that organisation, at least for now,” Mayowa said.