Foremost downstream operator in the Nigerian oil and gas sector, Capital Oil and Gas Industries Limited has opened-up on its high- wired face-off with the Petroleum Products Pricing Regulatory Agency (PPPRA), accusing the agency of flouting the Nigerian Content Law, in addition to allegedly favouring some unknown companies in the recent second and third quarter fuel importation allocation.
The media has been awashed with reports that the oil company had kicked against the recently-released second and third quarter petroleum product allocation and had forwarded a petition to the National Assembly and the Presidency.
But sources close to the mega company informed our correspondent last week that the battle is not over between PPPRA and Capital Oil; especially since the former had denied any wrongdoings in the allocations.
The CEO of Capital Oil and Gas Industries Limited, Mr. Ifeanyi Ubah had in the petition accused PPPRA of marginalising some marketers in the allocation of petroleum import approvals.
Ubah had also demanded that PPPRA should make available to the public details of beneficiaries of its controversial import approvals for the period.
The petition which was dated July 16, 2010 reads in part: "We have observed with dismay the Agency’s manipulation and non-transparency in the administration of the newly introduced Sovereign Debt Instrument, (SDI). These manipulations and lack of transparency are largely underscored by the non-compliance with due process, the disregard of and discrimination against us in the granting of approvals and allocations to portfolio marketers in the importation of petroleum products, which became rampant in the second and third quarters of 2010.
Specifically, Ubah had written that “for instance, in the second and third quarters of 2010, some companies were allocated petroleum products import permit above their requests and installed capacities, some got allocations below their requests and installed capacities while others including Capital Oil and Gas Industries Limited with huge structure and investment got only 15, 000 metric tonnes.
But in response to the allegations, PPPRA had equally explained that Capital Oil and Gas had in the past demonstrated lack of capacity to import all that was allocated to it.
However, putting holes in PPPRA’s allegation “We do not deny the fact that we did not import petroleum products in 2009 because of our involvement in massive infrastructure development and capacity building in the area of extensive depots expansion, jetty and truck park terminal expansion and acquisition of distribution trucks/tankers which started since our debut in 2007.
“Also, the sudden and unexpected economic downturn that occasioned serious credit crunch, which hit the downstream sector of the petroleum industry harder than any other sector and coupled with the fact that there was no Sovereign Debt Instrument (SDI), which affected the bankers lending capacity and also made them to become overtly cautious in this regard, affected our ability to import petroleum products.
“However, since the introduction of the SDI, which came into force before the second quarter of 2010, and the fact that our company has completed its expansion projects, we indicated a renewed interest to participate actively in the importation of petroleum products under the PSF Sovereign Debt Instrument (SDI) Scheme in order to maximise the use of our newly completed capacity. The executive members of PPPRA visited our terminal during their tour of various ports and storage facilities in Lagos, and are aware of our expansion programme and can attest to our ability to handle large volumes”.
Accusing PPPRA of deliberately closing its eyes on Capital Oil and Gas expansive storage facilities and other facilities, the company said it now has a combined 28 wading arm gantry capable of wading 55 million litres a day
“It is worrisome that the management of PPPRA has decided to frustrate the Nigerian Local Content Act by turning deaf ears to the fact that Capital Oil and Gas Industries Ltd has worked hard, invested heavily, employing banking funds yet has been able to achieve so much within three years of commencement of our depot operation”, our correspondent was told last week.
According to the top official, Capital Oil and Gas is “the biggest indigenous downstream integrated facility in the country, it is also the only downstream company in Nigeria that is capable of dispensing 55 million litres of petroleum products in a day, which is approximately two days of Nigeria’s consumption need”, he pointed out.
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