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Fuel Subsidy Fraud Continues As PPRA Jettisons Transparency To Approve Errant Marketers


Indications have started to emerge that the Petroleum Subsidy Probe conducted by the National Assembly as well as all the actions promised by the various departments and agencies in Nigeria’s oil sector might end up not yielding any tangible result. The Petroleum Prodeuct Pricing Regulatory Agency (PPRA) recently gave approval to marketers for the lifting of Premium Motor Spirit (PMS) otherwise called petrol in the country.

During the recent mid-quarter performance review of PMS imports for the fourth quarter of 2011, Reginald Stanley, the Executive Secretary of the PPRA disclosed that marketers would get their subsidy claims for the importation of petroleum products. He stated that the mid-quarter performance review showed 27 % achievement by marketers. The low performance was attributed to the fact that marketers have been holding back to Imports due to the unavailability of credit lines by banks. Stanley however stated that “the recent pronouncement of the N 888 billion for subsidy provided in the 2012 budget should give enough comfort, both to the Marketers and Banks to resume imports very aggressively ”.

The list of the marketers approved to import fuel has further indicated that the old order is still being followed as far as importation of fuel is concerned. The PPRA issued permits to 42 “eligible” marketers for the supply of a total of 3, 575,000 MT (4, 794, 075,000 litres) of PMS for the second quarter of 2012 with a good number of firms fingered in the fuel subsidy scandal conspicuously on the list. According to a statement signed by the Executive Secretary of the PPRA, the volume to be supplied for the second quarter of the year is based on “Marketers performance in the past and their ability to secure the needed financing”.

The Approved Marketers are Nigerioan National Petroleum Corporation (NNPC), ACORN Petroleum, AITEO Energy, ASCON Oil Company, Avidor, Oil & Gas, Bovas & Company, Capital Oil & Gas, Conoil Plc, Dee Jones Petroleum & Gas Ltd, Dozzy Oil & Gas, Eterna Plc and Eurafric Coastal Services Ltd. Others include First Deepwater Ltd, Folawiyo Energy Ltd, Forte Oil Plc, Fresh Synergy Ltd, Heyden Petroleum Ltd, Honeywell Oil & Gas Ltd, Ibafon Oil Ltd, Index Petrolube Ltd, Integrated Oil & Gas Ltd and IPMAN Refining & Marketing Ltd.

Lubcon Oil Ltd, Masters Energy Ltd, Matrix Energy Ltd, Mobil Oil Plc, MRS Oil & Gas Ltd, MRS Oil Nigeria Plc, NIPCO Plc, Northwest Petroleum & Gas Ltd, Oando Plc, Obat Petroleum Ltd, Rahamaniyya Oil & Gas Ltd, Rain Oil Ltd, Sahara Energy Ltd, Shorelink Oil, Sea Petroleum & Gas, SPOG Petrochemicals as well as Swift Oil Ltd also got permits to import PMS. Techno Oil, Total Nigeria Plc and A-Z Petroleum Ltd too were given approval.

Though it was contained in the notice sent to the Marketers that “any volume discharged in excess of the approved volume for the quarter shall not be considered for payment under the scheme except with the usual operational tolerance of +/- 10%”.

It has also been found out that the PPRA’s Executive Secretary has tactically rescinded his statement earlier that marketers who underperformed in the last quarter of 2011 would be sanctioned. In a more recent statement, Stanley disclosed that “the Agency decided not to hold Marketers responsible for the poor performance in Quarter 4 of 2011 and Quarter 1 of 2012 when supplies were at about 33%,  as it was occasioned by a force majeure in the operating environment.”

Findings have revealed that the old order might yet remain as there is really nothing to show that the real issues that brought about the crisis that trailed the removal of the fuel subsidy in January have been addressed in any way. The absurdities that led to the probe are still very much intact and with the likelihood of the probe panels’ reports ending up in the thrash can, the milking of Nigeria will continue for some time. Nothing has also been put in place in terms of techniques to measure the volume imported by each marketers save the papers tendered. This has also raised questions as to whether transparency was considered while issuing the approval for importation of PMS for the second quarter of 2012. Nigerians in certain quarters are also wondering if the issue of the difference between the fuel imported and the fuel consumed in the country has been bridged.

Street Journal’s investigations revealed that a good number of the companies making mega fortune from the importation of fuel into Nigeria were not registered for such business concerns with the Corporate Affairs Commission. One of such examples is the Acorn Petroleum Plc. On the papers of the Corporate Affairs Commission, the company’s interests were listed as “to prospect, explore, open and work claims or mines, drill and sink shafts or wells and raise pump, dig and quarry for petroleum and other allied substances.” No one in Nigeria’s Petroleum sector has however bothered to ask why the company does more of importation than drilling.

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