The National Transportation Allowance (NTA) or Equalisation scheme is the original function of the Board. At inception the scheme was restricted to eight (8) Major Marketing companies. It has since been extended to include all Major Marketing companies, Depot and Petroleum Product Marketers Association (DAPPMA) operators and Independent Petroleum Marketers Association of Nigeria (IPMAN) members.
For effective implementation of the Equalisation function the country was divided into Depot districts which are parts of the country served by a particular depot. The Depot districts are further sub-divided into Zones. These Zones are progressive bands of 50 kilometer radius, with the Depots as the center-point to the maximum of 9 (nine) Zones, which is a total of 450km.
Under the scheme, petroleum product retail outlets are assigned to the nearest primary and secondary NNPC loading Depots, depending on their distances from such Depots. The distance between them is applied in determining the transport cost of moving products, which is the only variable factor in pricing. This arrangement is effected by the use of the Transportation Differential Zone (TDZ) Map.
To effect equalisation, calculations are based on returns on products lifted from each Depot to the respective Zones within the district. The net effect of the returns culminates in either Claims from, or Contribution to the fund. Each Depot District is divided into 9 concentric circles of 50km each and contains a maximum of nine (9) Zones per district (or 450km).
Retail outlets located within 0-100km (Zones 1-2) from the loading or receiving Depots fall within the Contribution Zones and those located within 101-450Km (Zones 3-9) are within the Claim Zones.
The Equalisation scheme is administered by a matrix of rates formulated to even out cost impact of distances covered moving from the Depot to retail outlets.
For every litre of petroleum product transported within Zones 1 and 2, the Marketer has a Transport Allowance built into the price of the products which the Marketers hold in trust on behalf of the consumer, and is required to turn it over to the Board. Also for every litre of product transported from Zone 3 through to Zone 9, the Marketer claims from PEF (M) B, the additional Transportation Average (NTA).
The Board, thus reimburses the Marketer for losses incurred, solely and exclusively, for transporting petroleum product for sale at approved price in those Zones.National Transportation Allowance (NTA) COLLECTIONS AND CLAIMS SETTLEMENT
NTA is mainly collected from two kinds of product transactions: Bridged products and Local transactions.
National Transportation Allowance (NTA) on Bridged products are deducted at source from Marketers that are within Zone 1 and 2 (Claim Zone); while those within Zone 3-9 (Contribution Zone), are reimbursed for both the NTA and Bridging elements of their transactions.
This refers to transactions that involve the direct movement of products from loading Depots to retail outlets. This is predominant in the south, owing to the collapse of the national pipeline network. All Marketers in this category are expected to pay NTA upfront at the point of loading and seek re-imbursement afterwards, if their retail outlets fall within the Claim Zones
BENEFITS OF NTA
A key price stabilisation mechanism for cushioning the transportation cost differentials incurred by Marketers;
Helps to minimize petroleum product price discrimination;
Enhances economic stability through appropriate pricing;
Fulfils statutory obligation as captured in the enabling act, and
Provides Supplementary funding source to argument the Bridging fund.
CHECKLIST FOR THE AUTOMATED PROCESSING OF CLAIMS (BRIDGING, INTERDISTRICT and NTA)
- Bridging Acknowledgement Form (endorsed by the Depot Representative)
- Meter ticket/ Waybill/ Invoice/ Loading ticket
- PEF(M)B loading and receiving stamps on the above duly signed and dated by PEF(M)B depot representative
- Stakeholders’ stamps at loading and receiving depots.
- Product Out-Turn Report/form (in the letter-headed paper of the outlet station and duly stamped and signed by the Station Manager), confirming that the product was discharged at the outlet.
- Meter ticket required for NTA Local Lifting’s signed by the Receiving Depot Representative and Stakeholders.
- Products must be delivered within ten (10) days of lifting.
- Cases of breakdown and final date of delivery of product should be reported within 10days from date of breakdown to the Receiving Depot representative
- PEF(M)B reserves the right to change any of the above without prior notice.