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Fuel crisis looms as controversy trails 2nd qtr import approval

By Yemie Adeoye
THE nation may be heading for another round of fuel crisis as withdrawal and review of the second quarter import permit by the Petroleum Products Pricing and Regulatory Agency, PPPRA, one week after the approval was issued to importers of petroleum products appears to be generating controversies amongst marketers.

Vanguard gathered that PPPRA gave out permit to 53 oil marketers to import approximately 3.7 million metric tonnes of Premium Motor Spirit, PMS, on 31March, but withdrew the approval on 7 April and issued a new one in a manner that was alleged to have favoured two major marketers and one independent marketer at the detriment of others.

According to investigation, the interest shown by few marketers, that had earlier abandoned importation when there was crisis, to monopolise the fuel importation regime was due to government’s plan to issue Sovereign Notes as collateral or guarantee against future delay in payment of subsidy.

Government’s previous delay in payment of subsidy made some top marketers to stop fuel importation and rely on the Nigerian National Petroleum Corporation, NNPC, for imported fuel. This situation was said to have created the last fuel crisis that hit the country.

The initial list released on March 31 contained 53 companies, comprising major and independent oil marketers. But when PPPRA asked all the 53 oil marketing firms to return the approval letters on 6 April, only 25 of the 53 companies got approvals to import petrol for the second quarter of the year.

Apart from reducing the number of companies from 53 to 25, some of the well established oil marketers that appeared on the second list had their allocation slashed by over 50 per cent, without any explanation by the PPPRA.

Some officials of these companies, who spoke on condition of anonymity threatened to petition the National Assembly to conduct public hearing on the issue.

“If they (PPPRA) are saying that some of the companies are unknown, what are they saying about some of us that were importing products when others stopped importation over the delay in payment of subsidy?

“If some marketers deserve compensation, we are the ones that are supposed to be given such compensation and not all these people that ran away when the sector was in crisis. The former Minister of Petroleum was begging them to have faith in the system and continue importation but they all ignored him. Now, that the situation has improved, they want to shortchange others and dominate the sector,” said one of the aggrieved officials.

He wondered why some marketers got allocation that is far in excess of their capacity. But a PPPRA official who also spoke on condition of anonymity insisted that the action of the agency was in line with the Petroleum Support Fund (PSF) guidelines.

“According to the PSF guidelines, for companies to be eligible to enjoy subsidy, they must be registered as oil marketing companies with the Corporate Affairs Commission (CAC); they must have storage facilities of 5,000 MT for the particular product and retail outlet network; and they must have the ability to finance a minimum of 5,000 MT cargo of product,” he said.

But another affected marketer wondered why it was after issuing the allocation that PPPRA suddenly discovered that some of the marketers do not have the capacity to import products.

“They have been giving allocation to us and we have been exhausting our permit. Why is it that it is only now that government wants to issue sovereign bonds that they suddenly discovered that some marketers are unknown.

They just want to use that as excuse to create another cartel that will hijack the business for selfish motives. Honestly, the National Assembly should be asked to investigate the whole issue,” he enthused.


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