Lagos — The raging controversy over alleged shady deal in the award of the second quarter fuel import allocation leveled against Petroleum Products Pricing Regulatory Agency (PPPRA) by some depot operators took a new dimension as the Executive Secretary of the Agency, Mr. Abiodun Ibikunle described the campaign as the handiwork of a cartel that wanted to take over the industry through the back door.

The Executive Secretary said in a statement entitled "Facts on petroleum products allocation by the Agency". He disclosed further that the agency had paid a total sum of N1.1 trillion under recovery to the Nigeria National Petroleum Corporation (NNPC) in the last four years as fuel subsidy while other marketers collected over N761 billion under recovery on fuel subsidy in the period under review.

Over recovery for NNPC during the same period was put at over N8 billion while that of other marketers was put at over N5.6 billion.

The total under recovery (subsidy) paid to the NNPC and other marketers from 2006 to 2010, was put at over N1.9 trillion while over recovery paid to both between 2006 and June 2010 was put at over N14 billion.

The Petroleum Support Fund (PSF) Scheme was inaugurated by the Federal Government in 2006 to mitigate the effects of volatility in international crude oil and products and thereby stabilize domestic prices. The Fund did not come into being until after four years of intermittent price increases,with the attendant stiff opposition from the people.

The PSF mode of payment is based on either under or over recovery of costs of products.

Under recovery is when the landing cost of products is more than the approved ex-depot price. During the period of under recovery, marketers are expected to be paid the difference in the landing cost of products and the government approved ex-depot price.

Over recovery on products, on the other hand, occurs when the landing cost of products is less than the approved ex-depot price. Marketers are then expected to pay back into the Fund.

The PPPRA statutorily administers the scheme in collaboration with other relevant government agencies such as the Ministry of Finance, Accountant General of the Federation, Central Bank of Nigeria, Budget Office of the Federation and a Government appointed external auditor.

To buttress its argument that the campaign was the handiwork of a cartel in the industry, the agency said that most marketers, who were issued quarterly allocation could not meet up the volume allocated to them in the first quarter. "Available data shows that most marketers import less than 50% of the total quarterly quantity allocated to them in the first quarter, yet they are the ones making the loudest noise", PPPRA said in the statement.

It would be recalled that the House Committee on Petroleum Resources, had asked the Executive Secretary of PPPRA, Mr. Abiodun Ibikunle and other directors to appear before it over allegations that the agency had been allocating fuel importation to contractors without significant investment in the downstream sub-sector, while some indigenous companies that are taking risks to secure loans at high interest rates from banks to finance construction of jetty are not being considered with commensurate allocation to their investment.

The chairman, House Committee on Petroleum Resources, Hon C.I.D Maduabum confirmed the development to LEADERSHIP.

The National Union of Petroleum and Natural Gas (NUPENG) last week also asked the Federal Government to constitute a panel to probe the second and third quarter fuel importation approvals as well as sack indicted officials on conclusion of the probe. The workers' union threatened to protest in a way that it will not affect the common man if the Federal Government failed to review the approvals.