Senate Reveals Oil Subsidy Beneficiaries

* Oando, MRS, Capital Oil, AP, Honeywell Petroleum, First Deepwater, Obat and others on the list

Revelations with regard to how 1.4 Trillion Naira allegedly spent to fund fuel subsidy emerged yesterday as the Senate reeled out the names of more than 100 companies that benefited from fuel import contracts this year.

The chairman of the Senate Joint Committee on Petroleum (Downstream), Appropriation, and Finance investigating the operations of the fuel subsidy scheme in the country, Senator Magnus Abe (PDP, Rivers), who read out the names at the resumed public hearing organized by the committee, said the list included some construction companies that have nothing to do with the petroleum industry.

Abe’s revelation was corroborated by the Executive Secretary of the Petroleum Products Pricing and Regulatory Agency (PPPRA), Mr. Reginald Elijah, who however put the figure at 1.348 Trillion Naira.

Among the beneficiaries and their levels of benefits, according to Abe, are Oando Nigeria Plc (N228.506 billion), MRS (N224.818 billion), Folawiyo Energy (N113.32 billion), African Petroleum (N104.58 billion), Enak Oil & Gas (N19.684 billion), Conoil (N37.960 billion), Bovas & Co. Nig. Ltd. (N5.685 billion), and Obat Oil (N85 billion).

Also mentioned are Integrated Oil and Gas (N30.777 billion), IPMAN Investment Ltd. (N10.9 billion), A.A. Rano (N1.14 billion), A-Z Petroleum (N18.61 billion), A.S.B Investment (N3.16 billion), Arcon Plc (N24.116 billion), Aminu Resources (N2.3 billion), Capital Oil (N22.4 billion), Avante Guard (N1.14 billion) Avidor (N3.64 billion), Boffas and Company (N3.67 billion), Brilla Energy (N960.3 million), De Jones Petroleum (N14.86 billion), Down-stream Energy (N789.648 million), Dosil Oil and Gas (N3.375 billion), Inco ray (N1.988 billion), Eternal Oil (N5.574 billion), Frado Intern-ational (N2.63 billion), First Deepwater Oil (N257.396 million), Heden Petrol (N693 million), Honeywell Petrol (N12.2 billion), AMP (N11.417 billion), Ascon (N5.271 billion), Channel Oil (N1.308 billion), and Fort Oil (N8.582 billion).

The PPPRA boss however disclosed that the nation spent N3.655 trillion on fuel subsidies between 2006 and September 2011. Total of what was paid as subsidy between 2006 to date was put at 3.655 trillion Naira with the committee unable to reconcile the sudden jump in the subsidy figure in 2011, almost half of which was incurred in the first nine months of this year.

The Senate committee discovered that some of the beneficiaries who claim to be oil marketers did not meet the guidelines spelt out for prospective oil importers eligible to benefit from the subsidy fund, saying most of them made false claims, thereby constituting big drains on the nation’s oil and gas industry.

According to the guidelines, prospective beneficiaries are expected to be registered oil marketing companies who must provide proven ownership of fuel storage facilities or tank farms (petrol depots) of not less than 5000 metric tones. It was however discovered that while only 11 marketers own storage facilities, the remaining were “throughput” (sharing depots with filling stations) and some were registered construction companies.

The Group Managing Director of the NNPC Austin Oniwon told the panel that whereas a locally refined barrel of petrol costs $5, with a subsidy of N11.85 per barrel, the independent marketers were being subsidised with N77 per litre of N138.71, amounting to N12,243 per barrel.

But the publication of the companies’ name should not be misconstrued as a verdict of guilt. Oil marketers are businessmen whose activities can only be deemed illegitimate if they make claims inconsistent with what they had supplied.

Before adjourning the public hearing till Monday, December 12, the Committee Chairman directed the NNPC boss to produce total amount expended on turn-around maintenance of the nation’s refineries from 1999 to date, total dividends accruing to NNPC from the Joint Venture Companies, names of guilty marketers, investigations conducted, results and subsequent sanction to defaulters at the next sitting. 

Source: ThisDayLive