Reps, NNPC, PPPRA and fuel importation

By Bola Badmus - Updated: Tuesday 03-11-2009

Dimeji BankoleThe issue of fuel importation, supply and distribution, among others, is an area of special interest to the House of Representatives.

The House has an oversight legislative function on several agencies of government that undertake different activities in the country’s petroleum industry, including the Nigerian National Petroleum Corporation (NNPC), Petroleum Products Marketing Company (PPMC), Petroleum Products Pricing Regulatory Agency (PPPRA) and Department of Petroleum Resources (DPR) through its committees.

Presently, petroleum is central to the economy. It powers automobiles and others have direct impact on the lives of many Nigerians and, therefore, a snap in importation, supply and distribution chain of the product always results in serious hardships for the people.

It was, therefore, a matter of concern for the House when a report came that a cartel in both NNPC and PPPRA is receiving N75million bribe daily, having succeeded in denying major fuel importers opportunity to import fuel into the country.

Last Tuesday, House Committee on Petroleum Resources (downstream) rose to the occasion and summoned the management teams of NNPC, PPPRA, Glencore, Vitol, Transfigore, Capital Oil and Folawiyo Petroleum and others with a view to investigating them on the ‘grave allegation’ of bribery.

When those agencies and corporate organisations appeared before the committee, presided over by its Deputy Chairman, Honourable Aro Bamidele, it became clear from the various questions posed by the lawmakers, including Deputy Speaker, Honourable Usman Nafada that both the NNPC and PPPRA had, for reasons best known to them, violated the laws guiding the operations of the oil industry.

Executive Director of PPPRA, represented by Prince Abunar Isiaku, disclosed to the committee that in anticipation of the take-off of deregulation of the country’s oil industry, the agency just decided, on its own, to stop granting permit to fuel importers, since middle of July.

According to him, no permit has also been granted to any fuel importers in this quarter in which first month has already gone. But he told the committee that consultations were still ongoing as regards granting of permit to cover the last quarter of the year.

The NNPC, which has now taking over the sole importation of fuel in the country, perhaps with just a major private importer, Transfigore, disclosed that the agency’s decision to take over the business was aimed at avoiding a repeat of fuel queues at filling stations in the country. The NNPC also disclosed that most of the fuel importers were not up and doing, saying some of them were owing between $500million and $1billion which, he said, they had found difficult to pay through their banks for 10 months now because of the economic melt-down.

Also, the issue of payment of subsidies was raised at the investigation. Nafada, an accountant by profession, insisted that the NNPC had not been following the normal channel to receive their fuel subsidies as applied to other importers.

According to him, the NNPC deducts the subsidies due to them directly from the sales they make before paying the balance to the Federation Account (FA). Whereas, it is PPPRA that is supposed to pay such money to the NNPC.

The system for payment of such subsidies, as they know it in NNPC, was what Aminu Babakura termed “off- set.” However, he tried, many times, to correct the impression held on the issue by the deputy Speaker.

Representative of DAPMAN, who spoke before the panel of investigators, argued that private fuel importers were better placed to do the business of fuel importation into the country, pointing out that they have facilities as well as well-maintained depots, unlike the NNPC which always relied on facilities of these private fuel importers. According to him, the charge NNPC pay to facility owners per litre of fuel is N3.

As if to put a lie to what the NNPC said about the need for its intervention in fuel importation, just the following day, fuel queues became a common sight in all the filling stations in Abuja, the Federal Capital Territory (FCT), as it became more difficulty for people to acquire the commodity.

A committee member, Honourable Samson Osagie, who reviewed the situation, remarked that even though the House was yet to prove the allegation of N75 million daily bribe, it was certain that the system, which had ensured withholding of license to fuel importers and left the field to only NNPC and one or two others, showed the existence of a cartel in the oil sector.