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PPPRA disagrees with Reuters on import allocations

By Clara Nwachukwu

Petroleum Products Pricing Regulatory Agency, PPPRA, has declared reports published by Reuters regarding the third quarter allocations for fuel import as “misleading and grossly wrong.”

PPPRA’s Executive Secretary, Mr. Reginald Stanley, in a telephone interview with Vanguard, yesterday, insisted that no company indicted in the subsidy fraud was included in the latest allocations as reported by Reuters.

He said: “No company that was indicted in the subsidy claims report can import petroleum products under the new dispensation. In fact, even if we were foolish enough to include any of them, they will get stuck because the Ministry of Finance will not pay them.

“Finance is resolute in cleaning up the subsidy mess, and has not even finished paying off the genuine claims. So it will be a big risk for any company indicted to go importing fuel, when it has not yet been cleared, and no businessman would want to tie down his or her money indefinitely.”

Reuters had listed Nepal, Fresh Synergy, Ibafon and Techno, as the “four companies that failed to cooperate with parliament’s probe and were named as suppliers, which the parliamentary report showed collectively claimed subsidies of nearly $60 million.”

The report further added: “At least three other companies awarded third quarter allocations— Masters, Matrix and MRS— were also ordered to account for their shipments or refund falsely claimed subsidy money in another government report released last June.

“Matrix provided documents to Reuters showing it had since been exonerated by Nigerian authorities.

“The other firms declined or did not respond to repeated requests for comment by e-mail and telephone. It was not clear if these companies had since repaid their debts or been cleared.”


However, Stanley clarified that all of the companies mentioned by Reuters were cleared in the subsidy report, saying “Masters has been cleared by Special Fraud Unit, SFU; Nepal’s issue with Economic and Financial Crimes Commission, EFCC, is closed out.

“In fact the company now has a depot at Ogara. The PPPPRA team inspected it. The depot was dully certified by Department of Petroleum Resources, DPR, having met all the necessary requirements for depot operations and MRS was never indicted.

“So all the companies that have been cleared by SFU and EFFC, that meet the requirements to participate in Petroleum Subsidy Fund, PSF, which include being a registered Nigerian company, ownership of a certified and registered depot and a host of others, are free to participate.”

Stanley added that it is on the basis of these criteria that the foreign suppliers, including Vitol , Mercuria and Trafigura, which were mentioned by Reuters as being excluded from the list of over 40 companies given approvals to import cannot participate.

According to Stanley: “Vitol, Mercuria and Trafigura cannot be part of the domestic supply programme because they are not registered Nigerian companies; and they have never participated in PSF before and cannot participate in it.”

He reiterated that the current administration has plugged all the leakages and avenues for corruption in the subsidy claims, adding that the process has been fortified with the current tracking system introduced by the Agency for monitoring fuel imports.

Marketers commend PPPRA programme

Confirming the transparency of the current allocation method by the PPPRA, the Executive Secretary, Major Marketers Association of Nigeria, Mr. Obafemi Olawore, said: “We are very much happier with the current allocation process; it is much more transparent and you cannot find any of those briefcase-carrying companies on the list anymore..

“The truth is that Stanley is not reinventing the wheel, but actually implementing the PPPRA Act to the letter. That is all that he is doing, and it takes a leader that is determined and disciplined to insist on obeying the books to the letter.”

Reuters Report

The Reuters report read in part: “Nigeria has expanded its list of fuel suppliers to include companies previously named in a multi-billion dollar subsidy fraud investigation, sources familiar with the matter said, while large global trading houses have been left empty-handed.

“Africa’s most populous country, which relies on fuel imports because it lacks the capacity to refine its own crude oil, tried to remove fuel subsidies last year but was forced to partially reinstate them after a wave of strikes and protests.

“A parliamentary investigation later found the subsidy’s administration had facilitated around $6 billion of corruption over three years, with half the approved fuel imports never arriving or being sold to neighbouring countries.

“Nigerian authorities have taken some measures to improve controls,” said Marc Gueniat of Swiss NGO. The Berne Declaration which campaigns against corruption in the developing world.

“But the fact that certain companies accused of participating in the fraud are continuing to benefit from allocations raises the question of whether the political will to change is sincere,” he added.

Nigeria’s gasoline subsidy soaked up 1 trillion naira ($6.2 billion) last year, equivalent to 20 percent of the federal budget and exceeding a budgeted 888 billion naira.

The list of gasoline importers compiled by Reuters using information from five sources showed around.


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