As part of the ongoing sanitisation of the downstream sector of the oil and gas sector, the Petroleum Products Pricing Regulatory Agency (PPPRA) may blacklist oil-marketing and trading companies (OM&Ts) that were indicted by the Aig-Imoukhuede Presidential Committee on Verification of Subsidy Payments.
Only 32 OM&Ts were issued permits to import petrol in the first quarter of this year as against the 38 that participated in the fourth quarter of 2012.
A top official of the agency told THISDAY during the weekend that the agency’s decision to exclude the indicted companies from the 2013 first quarter allocation was a short-term measure, adding that long-term sanctions would include their permanent exclusion from fuel importation.
He however explained that not all the marketers excluded in the recent import allocation list were indicted by the presidential committee.
According to him, some of them were temporarily excluded because they could not demonstrate the capacity to finance the previous import allocations given to them.
“We are planning to treat indicted marketers like the briefcase marketers, who were removed from the scheme because they had no facilities. We will remove the indicted marketers permanently from the subsidy scheme because they engaged in fraudulent activities.
“The fewer the number of credible participants, the more manageable the entire scheme will be and the healthier the industry.
“We started this scheme in 2006 with only three major marketers, NNPC (Nigerian National Petroleum Corporation) and NIPCO Plc and there was no fraud. There was no crisis in supply.
“In 2007, five major marketers, two independent marketers, as well as NNPC and NIPCO participated and the whole country was wet with products.
“In 2008, there was no incident when 17 independent marketers participated. In 2009, 24 independent marketers joined and it went on smoothly.
“It was in 2010 and 2011 when over 100 companies participated that some of these companies engaged in all forms of fraud.
“If these things had happened in some other countries, some of these CEOs would have been sentenced to long jail terms by now,” he said.
On what would happen to the huge investments made by some of the indicted companies, the source stated that the companies could still continue to engage in the business of trading in petroleum products but would not be allowed to engage in direct importation of products.
Meanwhile, some of the marketers that got allocations have alleged preferential treatment against the PPPRA in terms of volume of allocation.