Nigeria: Folawiyo Energy denies violating regulations on sale of petrol

*Petroleum tank farm.

*Petroleum tank farm.

17 December 2015, Lagos – Folawiyo Energy Limited, FEL, has denied the allegation by the Department of Petroleum Resources, DPR, that it allowed the use of its depot by a third party to sell petrol above the official ex-depot price of N77.66 per litre.

The company was suspended by the regulatory agency from importation of for three months, in addition to the payment of N10 million for allegedly allowing Sahara Energy Resources to use its depot to breach the stipulated price.

Five other marketers were also slammed with similar sanctions for selling petrol above the government’s ex-depot price.

But Folawiyo Energy has firmly affirmed its innocence of any infractions of the regulations that guide the sales of petroleum products.
The company said in a statement last Monday that it has not had its own products in storage for the past three months,

According to the company, it has only stored and distributed products for the Nigerian National Petroleum Corporation (NNPC), without any involvement in collecting payments from the companies taking the NNPC stock.

The company’s Public Relations Consultant, Mr. Adeshola Komolafe, said the company was not involved in any conduct that could either attaract fines or be construed as selling fuel stocks above regulated prices.

“FEL’s Apapa depot has not held commercial stock since 20 September 2015. Operations at the depot since that date have been purely about dispensing NNPC and other third party stock, which is done following clear procedures and without any involvement by the company in charging or collecting payment for the stock. FEL has acted merely as storage and throughput providers,” Komolafe added.

According to him, the company cherishes its reputation for proper conduct and has through proper channels vehemently protested against this unfortunate attempt to besmirch its name.

Also a news report in the UK-based Times newspaper said DPR’s action has drawn Glencore into a trade dispute with the federal government as the FTSE 100 miner and commodities trader owns half of Folawiyo Energy.

The joint venture is operated by Yinka Folawiyo Group, although Glencore does have board representation.
Since he was appointed the Group Managing Director of the NNPC on August 11, and later Minister of State for Petroleum, Dr. Ibe Kachikwu has implemented raft of measures to sanitise the oil and gas sector.

Faced with a petrol scarcity that fuelled profiteering by the oil marketing companies, Kachikwu had directed the DPR to give out for free to members of the public, any petrol found to have been hoarded in any filling station in the country.

With average performance of the refineries at less than 10 per cent in 2015, the country’s lack of refining capacity and unpaid subsidy claims have fueled perennial fuel shortages, with motorists spending several hours on long queues.

The present administration has cancelled a swap regime whereby companies would be given crude oil in return for refined products, such as petrol as the system was criticised for being opaque and susceptible to corruption.

Glencore or its partner are not suspected of abusing the swap system, but there are concerns among oil marketing companies that the attempt by the current administration to clean up the industry are disrupting even those companies that play by the rules.

Though, Folawiyo, which is Glencore’s joint venture is accused of allowing its through-put customers to sell petrol at more than the official price, the company has written to the DPR to complain about the suspension, insisting that it does not have a say over the prices set by companies that use the depot.
*Ejiofor Alike – Thisday

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