…Applauds Oando, others for oil stream flow
The Petroleum Product Pricing Regulatory Agency (PPPRA) has commenced the process of re-certifications of oil marketing companies in line with a recent decision taken by stakeholders in the downstream sub sector.
According to the agency, this is being done after carefully reviewing the supply and distribution pattern in the country viz- a- viz the estimated requirement of the nation.
The main objective of the exercise is to de-list those companies that are performing and encourage those that have not done too well to sustain the current seamless product supply as well as further enhance transparency in the administration of the petroleum support funds.
It is perhaps the most transparent way of doing the business so that the performance of the oil companies be judged in the public courts, as the issue of allegations and counter allegation by some oil companies and PPPRA would not have arising at all.
An official of PPPRA told BusinessDay that this list, which is about 34 in number, might have increased by two or more because as at the time it was compiled it was 34 out of the 50 that were given licence to import in the third quarter. But these criteria still remain contestable as the fourth quarter allocation according to some operators did not indicate that it was followed. If these criteria were followed, some of those that got the allocation in the fourth quarter would not have got what they were allocated, as those that performed well were given less.
The criterium used by the agency for allocation is investment and previous performance.
Some of the companies that have performed well include: Oando, MRS, African Petroleum, Acorn Petroleum, Sahara Energy Resources, Sedec Energy, Matrix Energy, Master Energy, and Valcore Energy Limited – per their performance rather by the connections they can made.
Oando, which has the highest allocation of 666,000 metric tons after Nigerian National Petroleum Corporation, which had 5,135,000 metric tons, was able to supply 584,394.988 metric tons for the third quarter of this year. This may be because the company has large storage facilities and better financial standing than most of the companies that have not performed as they should.
The company is involved in large-scale export and import of petroleum products, and is a leading supplier of petroleum products to Nigeria. Oando Supply and Trading imported up to 4 million metric tons of white products into Nigeria between 2007 and 2009.
The company procures and trades a broad range of refined petroleum products and crude oil throughout Africa, Europe, Asia and the Americas. The products include Jet A1, Liquefied Petroleum Gas, Gasoline, Dual Purpose Kerosene, Diesel, Low/High Pour Fuel Oil, Naphtha, Base Oil and Bitumen.
Oando has access to 159.5 million litres of physical storage in major markets, strong management team with over 40 years combined trading experience, knowledge of local and regional market dynamics, access to trading lines in excess of $1billion, strong track record of delivery on all supply contracts. The company trades large volume cargoes to the Products and Pipelines Marketing Company (PPMC), the major oil marketer in the country as well as to independent marketers
Other companies like Sahara African Petroleum and Conoil also have facilities scattered across the country.
The agency has introduced some sanctions that would probably bring sanity into the whole system of supply and distribution. For example, any company that defaults for two consecutive times would be suspended from the scheme for one year, and also those who bring frivolous letters of undertaking of financing from any bank to secure non permit allocation.
It is expected that the PPPRA would also let the public know the performance of those given the fourth quarter allocation so that it would be possible for the public to assess them.