NNPC Mafia; Reps Discredit Thisday Report

The House of Representatives committee on the petroleum sector (downstream) has cleared the management of the Nigeria National Petroleum Corporation (NNPC) and two private oil product importers of allegations of sharp practices – (No mafia in NNPC?).

A report on THISDAY of October 24 accused a “clique in the NNPC of feeding fat from the millions of litres of petroleum products imported daily into the country by its subsidiary, the Pipeline and Products Marketing Company (PPMC).”

Read the THISDAY Report here.

THISDAY alleged that “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.”

At the end of the facility tour of Folawiyo Energy, Atlas Cove and Capital Oil, the leader of the delegation comprising of senior NNPC, PPMC and the House of Representatives committee on petroleum sector and chairman of the committee, Clever Ikisikpo, said these allegations “are unfounded and not true.”

The managing director of Folawiyo Energy, Tunde Folawiyo, and the manager of engineering at Capital Oil and Gas Company, Algis Cinimas, explained to the delegation that it was not true that the facilities leased from their company are too small and that vessels are compelled to queue for days, and in the process accumulate huge demurrage.

The managing director of the PPMC, Reginald Stanley, said that it was not true that vessels wait at the port for 28 days before discharging because the PPMC wants to collect $20, 000 from them daily.

He said that it was not possible for vessels to operate in Nigeria without incurring demurrage.

“A large vessel that is going to Apapa, will have to empty some of her content to a smaller ship before she berths, otherwise she will go aground,” he said, adding, “for her to go to Apapa, she has to spend time to transfer her contents to a smaller ship. The time it uses to transfer to a smaller ship is when the demurrage is incurred.”

Atlas cove is working

Contrary to initial reports that the NNPC had abandoned the Atlas Cove, the manager of the facility, Anthony Onwuka, told the lawmakers that though the militants’ attack on the facility disrupted its operations, the management was able to design a temporary facility.

“36 hours after the attack, we were able to build a temporary structure that will ensure that the attack does not affect the supply of petroleum product to Nigerians,” he said. “Though this facility is not fully operational but this temporary structure has been so far effective”.

At the time of the facility tour, a vessel- Nord Observer, loaded with Automobile Gas Oil (AGO) was discharging to the depot.

Mr. Stanley told the lawmakers that the reason why the NNPC patronised independent depot owners was because Atlas Cove could only store about 30 per cent of the product that the nation needs. “We have to look elsewhere for the remaining 70 per cent.

Finally, the committee leader praised the management of Folawiyo Energy and Capital Oil for helping the NNPC to ensure that petroleum products were available in the country.