Many companies which have virtually no investment in Nigeria have again been favo-ured to import petroleum products into the country this year.
THISDAY had reported last Friday that 28 companies had been given approval to lift Nigeria ‘s crude oil from March to December 2008, but only seven of them have investments in Nigeria.THISDAY can also report today that the same pattern has been replicated in the contracts awarded by the Nigerian National Petro-leum Corporation (NNPC) for the importation of petrol and diesel for this year.
Although some of the companies are registered in Nigeria, they exist only in name and many are promoted by foreign concerns which pay heavy “brokerage” to their Nigerian “agents”, most of whom are believed to be bureaucrats and politicians. Some are owned by Nigerians whose only interest is fuel importation as there is no evidence of any presence or investment in the oil industry. Fuel import is a lucrative business because of thefuel subsidy regime which guarantees a minimum pricefor the importers.
This is generally believed to fuel corruption, giventhat the contracts are worth over $15 billion yearly.About 10 per cent of this amount is allegedly paid as”brokerage” to the Nigerian “agents”.
“Some of the companies only exist at the CorporateAffairs Commission (CAC),” an industry analyst saidyesterday.
In the last administration, the contracts were awardedon a very large scale, far in excess of Nigeria ‘srequirements and beyond the import reception capacityof Atlas Cove. This is was to be part of the strategy to finance the failed third term bid of the last government.Ships were unable to berth to discharge their cargoesas a result and over N39 billion was believed to havebeen incurred by the NNPC in payment for demurrage.
Industry watchers have queried the rationale behindthe continuation of this policy especially since theNNPC is supposed to be capable of importing theproducts by itself.
However, a presidency source toldTHISDAY at the weekend that President Umaru MusaYar�Adua has vowed to put a permanent end to thecountry�s long history of fuel importation.
He has directed all discussions towards theconstruction of the long awaited private petroleumrefinery in Lagos State to be fast-tracked.The President�s vow followed the report from DeltaState that economic activities within the oil richcity of Warri had changed since the refineries resumedproduction on January 30, 2008, after almost two yearsof inactivity.
A presidential source told State House correspondentsthat the Warri Petroleum Refinery would resume 70 percent capacity production. It is expected to increaseto 90 per cent production capacity by the end of thismonth.
The source said the President�s promise was furtherre-enforced when he got signals that all is now setfor the resumption of production at the KadunaRefinery at a capacity of 70 per cent while there arestrong indications that this may jack up to 90 percent capacity before the end of March.
However, even if all the refineries are functioning,they can only produce 18 million litres of petrol perday, which is below the required 25 million litres.
�Part of the mandate of the Energy Council headed bythe President himself is to stop the regime of fuelimportation thereby making Nigeria self-sufficient inrefined petroleum products,� the source said.
According to the source, the President was not unawareof the fact that out of the 18 million litresproduced, Lagos alone consumes 55 per cent, hence hehas directed that investments in the sector should betargeted more at the Lagos axis.
�Lagos is key in the plans of Mr. President to growthe economy hence, the Federal Government is workingclosely with Governor Babatunde Fashola to actualisethe Lagos Megacity plan,� he said.
Feb112008