Major and independent petroleum marketers have petitioned the Presidency for a review of the third quarter allocation of fuel import contracts which was allegedly carried out secretly. They alleged lack of transparency in the way the Petroleum Products Pricing and Regulatory Agency (PPPRA) handled the second and third quarter allocations.

The agency (PPPRA) reportedly rejected requests by major and independent marketers for full disclosure of beneficiaries of fuel importation contracts approved for the third quarter. However, top officials of PPPRA pleading anonymity, disclosed that the presidency had been advised to dump the proposal to commence full deregulation in the downstream sub-sector of the petroleum industry since new refineries will reduce dependence on importation. They explained that on completion of the joint venture refineries, the nation will depend more on local sources to boost fuel supply.

The Petroleum marketers had petitioned presidency to make public, details of the companies that benefited from the allocations - their installed capacities, quantity of products applied for and quantity approved, the date of importation, port of discharge, vessel name, Naval/ Department of Petroleum Resources (DPR) clearance of such vessel, country of origin as well as names of the promoters of such companies should be made public, they demanded.

The petition also noted that, in the second and third quarters specifically, some companies were allocated petroleum products import permit above their request and/or installed capacity; some got allocation below their request and installed capacity while others with well established structures for supply and distribution got nothing.

The marketers pointed out that they are presently faced with a myriad of challenges including a huge debt overhang occasioned by the collapse in oil prices which hit the international market two years ago; the global economic downturn and its impact on the Nigerian economy and the current banking reforms.

Under the guidelines of the Petroleum Subsidy Fund, only companies that are registered as oil marketing companies with the Corporate Affairs Commission; those with proof of ownership of storage facilities of 5,000 MT for a picky product as well as dispensing facilities (retail outlet network); and companies with the ability to finance a minimum cargo of 5,000 MT of product, are eligible to draw from the fund.

Nonetheless, PPPRA with the support of the ministry has been outwitting the criteria for a long time, enabling ineligible companies to make claims for products they often do not import.

Reports reveal that in the third quarter, African Petroleum, MRS and Oando were allocated 180,000 Metric Tonnes (MT) each. Also, a company identified as SPOG Energy was allocated 210,000 MT, Pinnacle and Zenon Petroleum, 60,000, each, while Masters Energy and Capital Oil and were allocated 15,000MT each.

In the 2nd quarter, most of the companies listed by the PPPRA were unknown companies in the oil and gas industry. They included Alminur Resources Ltd, Annajul, ASB Investment Company Ltd, Delmar Petroleum Company Ltd, Knights Bridge Ltd, Lloyds Energy Ltd, Majope Investment Ltd, Menol Limited, Pinnacle Oil and Gas Ltd, Rosari Ltd, SEDEC Energy Ltd, Sirus Taglient Petro Ltd and Stonebridge Oil Ltd.

In the 2nd quarter allocations, Folawiyo Energy Ltd requested for 360,000 MT but saw its allocation reduced to 150,000 MT; Mobil Oil Nigeria Plc asked for 90,000 MT but was given 30,000 MT to import; Rahamaniyya Oil & Gas Ltd was slashed from 180,000 MT to 60,000 MT; Sahara Energy Resources was cut from 350,000 MT to 60,000 MT; and Honeywell Oil & Gas Limited from 90,000 MT to 15,000 MT.

A source from PPPRA spoke on condition of anonymity dismissed the allegations that the agency has been transparent in the handling of products allocation. He said that the agency allocates products to entities in accordance with the Petroleum Subsidy Fund (PSF) guidelines, which provides that only registered companies with proof of ownership of storage facilities of 5,000 MT or entities that have confirmed through-put arrangement with other companies are entitled to the products allocation.

He added that, about 50 companies applied for allocation, a number, which the agency viewed as too much. He denied the alleged manipulation of the SDI, saying it comes directly from the Debt Management Office (DMO), explaining that some marketers submitted their bids very late, but that 35 marketers who were qualified for the third quarter.