Petroleum Products Pricing Regulatory Agency (PPPRA) on Monday said it has issued licenses to 42 petroleum products marketing companies to import about 4million metric tons, or about 5billion litres of fuel for the second quarter of 2012.
Top on the list of beneficiaries include the Nigerian National Petroleum Corporation (NNPC) and some multinational oil marketing firms like Mobil Oil Nigeria (MON) and Total as well as some independent oil marketing companies like Conoil and Oando PLC, with storage facilities and distribution outlets across the country.
The delay in the issuance of the import licenses had triggered fears among consumers that the country might be heading towards another round of crisis in the supply of petroleum products, following recent revelations that previous licenses issued to importers were grossly abused.
Warning of stiff sanctions against companies that fail to deliver, the PPPRA said the 42 beneficiaries were selected based on their past records of performance and their capacity to secure the necessary fund to import the consignments.
“The volumes to be supplied into the system for Q2 2012 is based on marketers’ performance in the past, and their ability to secure the needed financing,” the agency said. “From Q2 onward, failure of a company to deliver the approved volume shall render the company liable for exclusion from the scheme for two successive quarters or more, aside from the payment of appropriate re-engagement fees to the agency.”
Since the January 1 attempt by the federal government to remove subsidy on petrol in country, which resulted in massive protests, the PPPRA, NNPC and all the other agencies involved in the marketing and distribution of petroleum products have been under investigation by both the National Assembly and the Economic and Financial Crimes Commission (EFCC) following allegations of large-scale fraud in the fuel importation programme.
In spite of the probes, a senior official who is close to the defunct board of the pricing regulatory agency said government would be hard-put implementing whatever recommendations submitted at the end as fuel import licenses were being used by the ruling party, the Peoples’ Democratic Party (PDP) as a tool to dispense favours to its loyalists.
“Most of the over 100 companies that got the import licenses were mainly agents of senior officials in government who turned around to sell their allocations to traders who would handle the importation on their behalf,” the official said in confidence. “Some of these traders may or may not bring in all the consignments, but the company that was given the allocation would still submit application for claims on the full allocation as if they were supplied.”
PlattsOil reports that the new contracts also attempt to tackle concerns about clean tanker demurrage at the country’s largest ports, where many vessels can wait up to a month before discharging their cargoes, compounding costs and supply concerns in the country.
It was gathered that the new licenses are a lot more restrictive than previous ones, not only in terms of volumes of products to supply, but also timelines for delivery, as the agency provides each company with specific import dates for delivery.