Igboamaeze
Oct 24, 2009, 09:22 PM
•60 ships wait to discharge cargo, accumulate demurrage •PPMC abandons Atlas Cove for private depots
By Yemi Adebowale, Thisday, 10.24.2009 (http://www.thisdayonline.com/nview.php?id=157895)
A clique within the Nigerian National Petroleum Corporation is feeding fat from the millions of litres of petroleum products imported daily into the country by its subsidiary, the Pipeline and Products Marketing Company, THISDAY has learnt.
Investigations revealed that the mafia, using PPMC, receives a commission of $500,000 (about N75 million) daily from international commodity traders, comprising Trafigura, Glencore and Vitol, that lift crude on behalf of the corporation and also import petroleum products for PPMC.
“Key officials of the NNPC and PPMC share the commissions paid by the commodity traders. Trafigura, Glencore and Vitol pay the commissions to sustain the importation contracts awarded by NNPC and/or PPMC,” a source alleged yesterday.
However, it was gathered that oil majors such as Shell, Exxon-Mobil and ChevronTexaco which from time to time import products on behalf of PPMC, despite subtle threats, have refused to pay any form of commissions to the NNPC mafia.
Also in a desperate attempt to feed fat from the inefficient marketing and distribution structure, it was gathered that the PPMC has abandoned the usage of its own Atlas Cove (Lagos) and Mosimi (Sagamu) storage facilities, in preference for Yinka Folawiyo Oil and Capital Oil depots, both privately-owned storage facilities in Lagos at a great cost.
The irony is that the storage facilities at Moisimi and Atlas Cove more than double those of Capital Oil and Yinka Falowiyo depots combined.
“PPMC pays these private depot owners N3 per litre for storage. Owners of these private storage facilities in return pay the NNPC mafia N1 on every litre of petroleum products stored.
“We are talking of big money here because millions of litres of petroleum products are imported daily. The storage capacity of Capital Oil is 30,000MT while that of Yinka Folawiyo is 60,000MT.
“So, for example, if Capital Oil’s entire facility is leased by the PPMC, N10,233,0000 will be paid for storage. The NNPC clique will then get N3,411,000 as kick back,” the source alleged.
Another conduit through which NNPC/PPMC officials line their pockets, is the over-importation of petroleum products.
The source said NNPC took this action to muscle out other major oil marketers from the importation of fuel products and show that it can single-handedly manage the importation of products into the country.
As at last Wednesday, about 60 vessels laden with PPMC’s petrol (premium motor spirit) had berthed in Nigerian territorial waters and were waiting to discharge in the third party storage facilities leased by PPMC.
However, since the facilities leased from Capital Oil and Yinka Folawiyo are too small, the ships are compelled to queue for days, and in the process accumulate huge demurrage.
On the average, they wait for about 28 days, before discharging, explained a source very conversant with the importation regime. He disclosed that PPMC pays $20,000 daily as demurrage on each of the vessels.
“The mafia at NNPC also makes good money from the demurrage charges. The official charge should not be more than $12,000 daily per vessel.
“However, port officials, working with the mafia and vessel owners send inflated invoice to the vessel owners. As a result, the difference of $8,000 makes its way to the NNPC mafia when money is paid,” revealed the source.
Attempts by the NNPC to turn itself into a monopoly in the petroleum products importation business has been a source of concern for major and independent oil marketers, which in the past used to get allocations from the Petroleum Products Pricing Regulatory Agency.
Independent and major oil marketers opposed to NNPC’s stance readily point to the persistent rise in the price of kerosene after its subsidiary PPMC became the sole importer of the product. Last night, kerosene was selling for as high as N115 per litre in most parts of Lagos.
Some of those opposed to NNPC’s plan to become a monopoly have started sending petitions to key government officials.
One of such petitions written by a major oil marketer to the Minister of State in the petroleum ministry, Odein Ajumogobia, pleaded for an immediate halt to the current regime.
In the correspondence, the marketer stated that NNPC’s plan to monopolise imports with its recent fourth quarter tender award and the refusal by the PPPRA to give marketers import letters for DPK (kerosene) may lead to severe product shortages before Christmas.
The oil marketing company continued: “NNPC’s position is not in the best interest of the nation. They may import as many cargoes as they like, but they lack the requisite logistical infrastructure to guarantee uninterrupted supplies when compared to the major marketers.
“The resultant effect of this is an increase in the national demurrage exposure as there will be long queues of ships waiting to discharge.
“Furthermore, the plan to use third party storage facilities for the discharge and distribution of products will only worsen the situation as major marketers who have made massive investments at Apapa will not go and load from those depots.”
Already there are indications that major oil marketers under their umbrella body, Major Oil Marketers Association of Nigeria, are preparing to make good their threat to stop fuel trucks from loading products discharged at third party facilities.
Their grouse stems from the fact that NNPC is doing everything to frustrate the competition and make itself the sole importer and distributor of products in the country, which is a throwback to what obtained in the 1990s and was not sustainable.
By Yemi Adebowale, Thisday, 10.24.2009 (http://www.thisdayonline.com/nview.php?id=157895)
A clique within the Nigerian National Petroleum Corporation is feeding fat from the millions of litres of petroleum products imported daily into the country by its subsidiary, the Pipeline and Products Marketing Company, THISDAY has learnt.
Investigations revealed that the mafia, using PPMC, receives a commission of $500,000 (about N75 million) daily from international commodity traders, comprising Trafigura, Glencore and Vitol, that lift crude on behalf of the corporation and also import petroleum products for PPMC.
“Key officials of the NNPC and PPMC share the commissions paid by the commodity traders. Trafigura, Glencore and Vitol pay the commissions to sustain the importation contracts awarded by NNPC and/or PPMC,” a source alleged yesterday.
However, it was gathered that oil majors such as Shell, Exxon-Mobil and ChevronTexaco which from time to time import products on behalf of PPMC, despite subtle threats, have refused to pay any form of commissions to the NNPC mafia.
Also in a desperate attempt to feed fat from the inefficient marketing and distribution structure, it was gathered that the PPMC has abandoned the usage of its own Atlas Cove (Lagos) and Mosimi (Sagamu) storage facilities, in preference for Yinka Folawiyo Oil and Capital Oil depots, both privately-owned storage facilities in Lagos at a great cost.
The irony is that the storage facilities at Moisimi and Atlas Cove more than double those of Capital Oil and Yinka Falowiyo depots combined.
“PPMC pays these private depot owners N3 per litre for storage. Owners of these private storage facilities in return pay the NNPC mafia N1 on every litre of petroleum products stored.
“We are talking of big money here because millions of litres of petroleum products are imported daily. The storage capacity of Capital Oil is 30,000MT while that of Yinka Folawiyo is 60,000MT.
“So, for example, if Capital Oil’s entire facility is leased by the PPMC, N10,233,0000 will be paid for storage. The NNPC clique will then get N3,411,000 as kick back,” the source alleged.
Another conduit through which NNPC/PPMC officials line their pockets, is the over-importation of petroleum products.
The source said NNPC took this action to muscle out other major oil marketers from the importation of fuel products and show that it can single-handedly manage the importation of products into the country.
As at last Wednesday, about 60 vessels laden with PPMC’s petrol (premium motor spirit) had berthed in Nigerian territorial waters and were waiting to discharge in the third party storage facilities leased by PPMC.
However, since the facilities leased from Capital Oil and Yinka Folawiyo are too small, the ships are compelled to queue for days, and in the process accumulate huge demurrage.
On the average, they wait for about 28 days, before discharging, explained a source very conversant with the importation regime. He disclosed that PPMC pays $20,000 daily as demurrage on each of the vessels.
“The mafia at NNPC also makes good money from the demurrage charges. The official charge should not be more than $12,000 daily per vessel.
“However, port officials, working with the mafia and vessel owners send inflated invoice to the vessel owners. As a result, the difference of $8,000 makes its way to the NNPC mafia when money is paid,” revealed the source.
Attempts by the NNPC to turn itself into a monopoly in the petroleum products importation business has been a source of concern for major and independent oil marketers, which in the past used to get allocations from the Petroleum Products Pricing Regulatory Agency.
Independent and major oil marketers opposed to NNPC’s stance readily point to the persistent rise in the price of kerosene after its subsidiary PPMC became the sole importer of the product. Last night, kerosene was selling for as high as N115 per litre in most parts of Lagos.
Some of those opposed to NNPC’s plan to become a monopoly have started sending petitions to key government officials.
One of such petitions written by a major oil marketer to the Minister of State in the petroleum ministry, Odein Ajumogobia, pleaded for an immediate halt to the current regime.
In the correspondence, the marketer stated that NNPC’s plan to monopolise imports with its recent fourth quarter tender award and the refusal by the PPPRA to give marketers import letters for DPK (kerosene) may lead to severe product shortages before Christmas.
The oil marketing company continued: “NNPC’s position is not in the best interest of the nation. They may import as many cargoes as they like, but they lack the requisite logistical infrastructure to guarantee uninterrupted supplies when compared to the major marketers.
“The resultant effect of this is an increase in the national demurrage exposure as there will be long queues of ships waiting to discharge.
“Furthermore, the plan to use third party storage facilities for the discharge and distribution of products will only worsen the situation as major marketers who have made massive investments at Apapa will not go and load from those depots.”
Already there are indications that major oil marketers under their umbrella body, Major Oil Marketers Association of Nigeria, are preparing to make good their threat to stop fuel trucks from loading products discharged at third party facilities.
Their grouse stems from the fact that NNPC is doing everything to frustrate the competition and make itself the sole importer and distributor of products in the country, which is a throwback to what obtained in the 1990s and was not sustainable.