[size=18pt]Marketers Kick over Fuel Import Contracts[/size]
By Chika Amanze-Nwachuku, 07.19.2010




Major and independent petroleum marketers have petitioned the Presidency, demanding a review of the third quarter allocation of fuel import contracts which was allegedly carried out secretly.

They alleged lack of transparency in the manner the Petroleum Products Pricing and Regulatory Agency (PPPRA) handled the second and third quarter allocations.

The aggrieved marketers want the presidency to compel the agency to make public, details of the companies that benefited from the allocations; their installed capacities, quantity of products applied for and quantity approved.

Also, the date of importation, port of discharge, vessel name, quantity imported, Naval/ Department of Petroleum Resources (DPR) clearance of such vessel, country of origin as well as names of the promoters of such companies should be made public, they demanded.

The oil dealers who further alleged manipulation in the manner the PPPRA handles administration of the newly introduced Sovereign Debt Instrument (SDI) said that the federal government, in the last few months, has paid out billions of naira to ‘brief case companies’ as imports subsidy on the recommendations of the PPPRA.
They have vowed that should the government fail to address the issue, they may be compelled to resort to other means to seek redress.

The petition written by the marketers noted that “in the second and third quarters specifically, some companies were allocated petroleum products import permit above their request and/or installed capacity, some got allocation below their request and installed capacity while others with well established structures for supply and distribution got nothing at all.

“In the interest of fair-play and transparency, we demand from PPPRA a publication of the full list of those companies which got petroleum products allocation in the second and third quarters along with their installed capacities, quantity applied for, quantity approved, date of importation, port of discharge, vessel name, quantity imported, Naval/DPR clearance of such vessel, country of origin as well as names of the promoters of such companies.

“We also demand that the current third quarter allocation which the PPPRA and its cohorts have secretly carried out be reviewed, the agency should equally give reason for not making the third quarter allocation public, otherwise, we shall be compelled to resort to other measures to seek redress."

The marketers alleged that the PPPRA leadership is flouting government policy by continuously favouring non-core investors in the allocation of products.

“We have borrowed and invested billions of naira to create employment and grow local capacity in the Nigerian economy through construction of tank-farms, filling stations, petroleum tankers as well as acquired ships and jetties, yet we are being denied allocation," said another marketer.

The marketers also noted that they are currently faced with a myriad of challenges including a huge debt overhang occasioned by the collapse in oil prices which hit the international market two years ago; the global economic downturn and its impact on the Nigerian economy and the current banking reforms.

“We are doing our best to cope with these challenges of huge debt overhang due to declining oil prices and shall not sit back and watch helplessly while misguided elements undermine government’s good intentions for the growth and development of the industry.

“Clearly, the recent passage into law of the Nigerian Content Bill underscores in more eloquent terms government’s good intentions. However, the second and third quarter allocation is obviously at variance with the aspirations of government to grow indigenous capacity,” the marketers stated in their petition.

Under the guidelines of the Petroleum Subsidy Fund, only companies that are registered as oil marketing companies with the Corporate Affairs Commission; those with proof of ownership of storage facilities of 5,000 MT for a particular product as well as dispensing facilities (retail outlet network); and companies with the ability to finance a minimum cargo of 5,000 MT of product, are eligible to draw from the fund.

But the PPPRA with the support of the ministry has been circumventing the criteria for a long time, enabling ineligible companies to make claims for products they often do not import.
THISDAY investigations revealed that in the third quarter, African Petroleum, MRS and Oando were allocated 180,000 Metric Tonnes (MT) each. Also, a company identified as SPOG Energy was allocated 210,000 MT, Pinnacle and Zenon Petroleum,  60,000, each, while Masters Energy and Capital Oil and were allocated 15,000MT each.

In the 2nd quarter, most of the companies listed by the PPPRA were unknown companies in the oil and gas industry. They included Alminur Resources Ltd, Annajul, ASB Investment Company Ltd, Delmar Petroleum Company Ltd, Knights Bridge Ltd, Lloyds Energy Ltd, Majope Investment Ltd, Menol Limited, Pinnacle Oil and Gas Ltd, Rosari Ltd, SEDEC Energy Ltd, Sirus Taglient Petro Ltd and Stonebridge Oil Ltd.

In the 2nd quarter allocations, Folawiyo Energy Ltd requested for 360,000 MT but saw its allocation reduced to 150,000 MT; Mobil Oil Nigeria Plc asked for 90,000 MT but was given 30,000 MT to import; Rahamaniyya Oil & Gas Ltd was slashed from 180,000 MT to 60,000 MT; Sahara Energy Resources was cut from 350,000 MT to 60,000 MT; and Honeywell Oil & Gas Limited from 90,000 MT to 15,000 MT.

Others companies, which had their requests slashed include: MRS Oil & Gas Ltd - 480,000 MT to 90,000 MT; Total Oil Plc - 60,000 MT to 30,000 MT; Acorn Petroleum Plc - 120,000 MT to 15,000 MT; Conoil Plc 120,000 MT to 60,000 MT; Integrated Oil & Gas Ltd - 90,000 MT to 15,000 MT; IPMAN Investment Limited - 90,000 to 30,000 MT; NIPCO Plc - 60,000 MT to 30,000 MT; and Masters Energy - 180,000 MT to 30,000 MT.

Reacting to the allegation that the PPPRA and the Ministry of Petroleum is doing everything possible to ensure that the third quarter import allocation schedule does not get into the public domain, the Petroleum Minister Mrs. Diezani Alison-Madueke distanced herself from allegations that she interfers in the daily operations of the PPPRA.

Speaking through the General Manager Group Public Affairs Division at the Nigerian National Petroleum Corporation (NNPC) Dr. Levi Ajuonuma, the minister said the allegations were baseless, given that the agency is not administratively within her direct supervision.

She added that the PPPRA is under the presidency and does not report to her. “Any insinuation to the effect that the minister interferes with the day-to-day running of either PPMC or the PPPRA is not only unfair, but a blackmail which will not be tolerated,” Levi stated.

Also, a PPPRA source who spoke on condition of anonymity last night dismissed the allegations and insisted that the agency has been transparent in the handling of products allocation.
He explained that the agency allocates products to entities in accordance with the Petroleum Subsidy Fund (PSF) guidelines, which provides that only registered companies with proof of ownership of storage facilities of 5,000 MT or entities that have confirmed through-put arrangement with other companies are entitled to the products allocation.

He said about 50 companies applied for allocation, a number, which the agency viewed as too much.  The source also denied the alleged manipulation of the SDI, saying it comes directly from the Debt Management Office (DMO). He explained that some marketers submitted their bids very late, but that 35 marketers who were qualified for the third quarter benefitted.