Nigeria issues import permits for 4.8bn litres of fuel in Q2Tuesday, March 13th, 2012
12 March 2012, Sweetcrude, ABUJA - The Petroleum Products Pricing Regulatory Agency (PPPRA) – Nigeria’s state fuel regulatory agency – says it has issued permits to 42 companies to import a total 3.575 million metric tons or 4.794 billion litres of petrol for the second quarter of 2012.
The agency stated this in a statement on Monday in Abuja, warning of sanctions against companies that failed to deliver.
“The volumes to be supplied into the system for Q2 2012 is based on marketers’ performance in the past, and their ability to secure the needed financing,” the PPPRA said in the statement.
The list of beneficiaries, made public for the first time by the PPPRA, includes state oil firm Nigerian National Petroleum Corporation, ExxonMobil and Total downstream subsidiaries, Oando and Conoil.
The PPPRA had delayed issuing the permits following series of investigations into previous fuel imports and payment of subsidy, which was deemed to have been grossly abused.
Uncertainty also entered the Nigerian fuel market due to the January 1 move by the government to remove a subsidy on imports that raised pump prices and triggered more than a week of a general strike and mass protests and forced the partial reinstatement of the subsidy.
PPPRA, which has been under investigation by the state anti-graft agency, the Economic and Financial Crimes Commission, over a $4 billion discrepancy between the subsidy paid to importers and the amount of gasoline brought into the country in 2011, said it would not pay the subsidy on any volume discharged in excess of the volume it approved for each company.
“From Q2 onward, failure of a company to deliver the approved volume shall render the company liable for exclusion from the scheme for two successive quarters or more, aside from the payment of appropriate re-engagement fees to the agency,” the PPPRA said.
The new contracts also attempt to tackle concerns about clean tanker demurrage at the country’s largest ports, where many vessels can wait up to a month before discharging their cargoes, compounding costs and supply concerns in the country.
“The new contracts are a bit more restrictive than the last ones,” a European trader with exposure to the West African market said Monday. “The new restrictions are not only quantities. The PPPRA is providing companies with specific import dates.”
Nigeria, Africa’s top oil producer, imports most of its petroleum products requirement despite a domestic refining capacity of 445,000 b/d, with consumption estimated at about 30 million litres a day.