The Challenges Facing Petroleum Equalization Fund (PEF)’s Aquila Project

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The Aquila Project is one of the best things that has happened in the Nigerian downstream oil industry in recent times. But few months after its commencement, the project is facing its difficult and test moment. Cases of theft and tampering with the Radio Frequency Identification (RFID) tags affixed on trucks, especially in the Lagos area, some petroleum marketers and haulers having little or no understanding of the workings of the project, acute shortage of the RFID tags are among the various difficulties facing the project.


The Aquila Project is an excellent electronic business solution designed to track the movement of regulated petroleum products throughout Nigeria -confirm loading and delivery of regulated petroleum products at all depots and retails outlets.  PEF believes the Aquila project, would bring efficiency in the management of volume of regulated petroleum products bridged across the country, it would also ease bridging claims payment to marketers and transporters; as well as eliminate the massive corruption that has hitherto characterized the payment of the bridging claims. Building a reliable data base for the downstream petroleum sector distribution is also one of the advantages of the project, according to PEF. Indeed, an excellent project. However, the emerging problems facing this innovative project, if not tackled, would rubbish it.

Before the introduction of the Aquila project, the PEF has been battling hard with so many challenges: rampant petroleum product diversion by haulers and marketers; absence of reliable data, fraudulent bridging claims (claims on waybills of undelivered products, popularly called bridging by air), cases of multiple registration numbers (plate number) for a single truck and insider abuses were also challenges in the management of the regulated petroleum products distribution system. However, with the introduction of the Acquila Project, all these problems were already being tackled, with reasonable success being achieved. For example, it has helped in the elimination of fraudulent claims and has put ‘vendors’ of petroleum products waybills out of business. But with the emergence of the aforementioned challenges, the project is under serious threat.

What then can be done by the Petroleum Equalization Fund Management (PEF) Board to safeguard and continuously improve on the project, taking into consideration the Nigerian mentality – the tendency of most people to try to circumvent laid down procedures.

Firstly, massive education and advocacy, including continuous publicity and advertising can be a strong tool in safeguarding the project.  For instance, some people were led to wrongly believe that the RFID tags affixed on trucks  contain mercury and SIM card for making free calls because some important targets  were left out in PEF’s  public relations and enlightenment  strategy – all people doing business in the depots regardless of their status should have been targeted in the enlightenment  programme. For example, drivers and motor boys who are always attached to the petroleum trucks can become bottleneck to the project.  If a driver, a motor boy, or a gate-man in the depots believe the RFID tags have mercury or SIM card for free calls, they would be tempted to steal it. 

All information technology business solutions have provisions for producing advanced versions;the Aquila Project cannot be an exception. Therefore, PEF’s IT support staff and service providers should search for more advanced ways to replace the physical RFID tags to either infrared or Bluetoothed entire truck. This would eliminate the cases of theft of the RFID tags, as well as render less-important, the RFID tags and truck’s registration number plate.

Another way of improving the solution is; the PEF management should be a more flexible with its representatives at the depots- it has been observed recently that PEF’s representatives at most loading depots in country are jittery to correct errors they make- either  captured  wrong destination, quantity, marketers name or product type. Human errors are found in running any application, including I.T. business solution. If PEF continues to be unnecessarily strict with its personnel at the depots for cases of ‘innocent’ error corrections, it risks losing one of the most important aspects in achieving efficiency- full disclosure. Its depots representatives would hide errors made, which in the long run, would harm the entire project. PEF should allow its representatives at the loading depots to do corrections on errors made, but with full disclosure, this would immensely help it in the continuous improvement of the project.

PEF should also restructure its collaboration strategy with major stakeholders. For instance, the six major oil marketers and NNPC Retails control the bulk of trucks and retails outlets in the Nigerian downstream oil industry. A stronger partnership with these major stakeholders in the area of tagging of trucks would relieve PEF of the burden of management of the tagsespecially of new trucks coming into the system.

Any electronic business solution has its challenges.  If all the challenges facing  the Aquila project are surmounted; the project can serve as  vehicle in providing the Nigerian government some vital information and data on  regulated  petroleum  products-  the exact litres loaded and exact litres received at each retail station in the country; the consumption pattern state by state or region by region, in addition to information on heavy truck movement on the Nigerian roads, including data on the actual national consumption of regulated petroleum products subsidized by tax payers money.

Nonetheless, PEF must be commended for this innovative solution to long-term national problems– irregularities in the management of the distribution and claims on bridged regulated petroleum products.
Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980. 

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