The Federal Government has spent about N2.070 trillion on Petroleum Support Fund (PSF) subsidy in the last four years.
Abiodun Ibikunle, executive secretary, Petroleum Products Pricing Regulatory Agency (PPPRA), said this yesterday in Abuja, adding that the amount covers between January 2006 and November 2010.
This figure excludes N98.05 billion by the Federal Government on foreign exchange differential payment as well as interest on delayed subsidy payment to petroleum products marketers during the period.
Mr. Ibikunle, while reviewing the downstream petroleum industry activities for the fourth quarter, gave the assurance that the agency has made adequate arrangements to ensure uninterrupted supply of petroleum products during the festive period.
"A market review by the agency by the middle of the quarter revealed that some marketers were not responding to the need to bring in petroleum products on time. Therefore, additional allocations were given to those marketers that were active and had the capacity, in terms of resources and storage facilities, to import, store, and ensure effective distribution to consumers.
"With the arrangement, we do not expect there will be any shortage in supply throughout this period," he said.
He attributed the uninterrupted supply of petroleum products in the country recently to the success of the PSF scheme, which was established in 2006 to help mitigate the negative impact of the volatility in the international crude oil and products and stabilise the retail pump price to consumers.
Prior to the introduction of the PSF, the PPPRA secretary said the country witnessed rapid increases in the prices of petroleum products, pointing out that since the scheme was established, government has been able to maintain stable fuel price regime at N65 per litre for the past two years.
Though the agency has been facing some challenges in the management of the scheme, he expressed happiness that they have been taken care of, particularly clearing the huge backlog of debt government owed petroleum marketers for imported products.
"The backlog of debts by government to marketers has now been cleared. The huge debt was a major challenge to products supply, as most of the marketers abandoned the PSF scheme and refused to bring in products since they were not sure their money would be paid on time. To that extent, the PSF scheme has succeeded in meeting government's objectives," he said.
He said with the introduction of the sovereign debt instrument, marketers have been assured the guarantee of prompt payment of subsidy claims, adding that consultations are ongoing with all relevant bodies on the issue of review of products pricing template, as demanded recently by major marketers and Petroleum Tanker Owners Association during a meeting in Abuja.
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