As part of measures to avoid fuel crisis following the failure of many Oil Marketing and Trading (OM&T) companies to access credit facilities from banks to import petrol, the Petroleum Products Pricing Regulatory Agency (PPPRA) has expanded the list of importers to over 40 companies for the third quarter 2013 import allocations. About 30 oil companies were previously accredited for the exercise in the second quarter.
The list of the importers for the third quarter includes Oando Plc, which won the biggest allocation of 135,000 tonnes, while Total Nigeria Plc and Folawiyo Oil and Gas won 90,000 tonnes each.
Before the Executive Secretary of PPPRA, Mr. Reginald Stanley, came on board in November 2011, the business of fuel importation into the country was an all-comers’ affair, resulting in manipulations and malpractices that swelled subsidy claims to about N2 trillion, which was considered by the federal government as unsustainable.
A total of 128 companies were engaged in fuel importation in the old regime thus providing an opportunity for the abuse of the system.
However, in the first import permit handled by Stanley in the first quarter of 2012, the number of participating companies was reduced from 128 to 42, before it was further reduced to 39 in the third quarter of 2012 and beyond.
The volume of imported products also dropped from 5.036 billion litres in the first quarter of 2012 to 4.20 billion litres in the third quarter. But due to growing concerns that the inability of these accredited importers to access credits from the banks could fuel another crisis in the system, the PPPRA has expanded the list for the third quarter 2013 to over 40 participating companies.
Efforts yesterday to get the official position of the PPPRA on the matter were not successful but a source within the agency told THISDAY that the list was slightly expanded because of the failure of some of the previous participants to exhaust their allocations.
“The approved list was amended to include more firms because some of the previous suppliers failed to perform due to difficulty in accessing credits. The Central Bank of Nigeria (CBN) had directed the banks against granting credits to these importers. That is why more companies were brought in to avoid fuel crisis,” he said.
The list compiled by Reuters using information from five sources showed that about 3.4 million tonnes of petroleum products were allocated for the third quarter to more than 40 companies.
The successful companies for the third quarter of 2013 were firms that were given a clean bill of health in the various subsidy probes conducted last year.
Some of the successful companies include Oando Plc, Folawiyo Oil and Gas, Total Nigeria Plc, Masters Energy Oil and Gas Limited, Techno Oil Limited, MRS Oil and Gas Limited, Nepal Energy, Fresh Synergy, Matrix Energy and Ibafon.
The Federal Ministry of Finance had previously said even companies indicted in the subsidy probes would not be delisted so long as they paid back money owed to the federal government.
The ministry would, however, not comment on specific companies but showed Reuters a document that showed that N14 billion or about six per cent of the N232 billion fraudulently paid to the importers had so far been recovered from some of the indicted firms.
Information from This Day was used in this report.