Tuesday, November 30, 2010

Nigeria: PPPRA Blacklists Fraudulent Oil Trader


The Federal Government will stop subsidising marketers who buy premium motor spirit from Noble Group, a Singapore-listed trader in a move likely to prevent the company from dealing in the county's $6 billion fuel market. Citing discrepancies in Noble's shipping lists, in a fax sent to all Nigerian fuel marketers, the Petroleum Product Pricing Regulatory Agency (PPPRA) warned that it will not accept claims for subsidies if the fuel comes from the Singapore trader.

"Any vessel transaction or bill of lading emanating from Messrs Noble Clean Fuels will not be accepted for subsidy claims under the scheme", the PPPRA said in the fax message signed by one Mr. O. Agbaje on behalf of the agency's Executive Secretary, Mr. Abiodun Ibikunle.

It was learnt that the regulatory agency discovered some irregularities in a transaction by Noble to the effect that the volume of fuel submitted for subsidies did not tally with the actual quantity of product delivered. Sources hinted that the foreign trader failed to come up with satisfactory responses to requests by the PPPRA for clarification on the said transaction.

However the blacklisting of Noble has elicited reactions from some petroleum products suppliers, some of who argued that the agency lacked the power to implement a blanket ban on the company.

Chief Executive of Petrodel Michael Prest, whose company also supplies product to the Nigerian market, in an interview with Reuters said he was familiar with the complaints about Noble's operations in Nigeria, but questioned any decision that would prevent it from supplying.

"Do you kill a company doing 30 percent of imports to the private market? What you should do is try to perfect what was clearly an imperfect system. What you don't want is to create a brick wall that frightens away suppliers such as Noble," he said.

Nigeria, Africa's biggest oil producer currently imports more than 90 percent of its petroleum products due the country's low refining capacity. All the four refineries, with combined installed capacity of 445,000 barrels per day, have for years operated far below their capacity utilisation.

As at April this year, the Department of Petroleum Resources (DPR) said the refineries in Warri, Kaduna and Port Harcourt performed at only 18.72 percent of their installed capacities.

The oil and gas industry regulator had blamed the situation on equipment failure, lack of haulage for some products and intermediates and lack of feedstock.

The recent attack on the Escravos Warri pipeline that feeds them the Warri and Kaduna Refineries, has further reduced Nigeria's refining capacity.

Prior to the attack by the Movement for the Emancipation of the Niger Delta, the Warri Refinery was said to have been operating at about 70 percent of its capacity utilisation of 125,000bpd.

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