Routing the Mafia

Mohammed Barkindo, NNPC GMD

The Nigerian National Petroleum Corporation (NNPC), moves to acquire 50 per cent of filling stations nationwide, in a renewed bid to check the activities of oil cartels
By Oji Odu
Determined to curb the perennial but largely artificial fuel scarcity of petroleum products in the country and break the monopoly that currently exists among oil marketers who play major roles in the supply chain, the Nigerian National Petroleum Corporation (NNPC), has begun the acquisition and control of 50 per cent of some filling stations nationwide.
In a press release by the corporation, signed by its media chief, Dr. Levi Ajuonuma, the NNPC revealed that it had concluded arrangements with some independent marketers to take over their filling stations so as to exterminate the monster of artificial scarcity and to sustain constant supply of fuel.
The Group Managing Director (GMD) of the NNPC, Dr. Mohammed Barkindo had penultimate Thursday, during a two-day consultative forum between the Federal Government and labour leaders on deregulation spoken in similar vein. The NNPC boss revealed that the corporation has already taken over 133 filling stations from the independent marketers.
Barkindo, who stated that the move is a partnership with the marketers, said that the 133 filling stations cut across the nation. The arrangement is expected to increase the mega and floating stations under the control of the NNPC to 37 and 12 respectively.
This move is, indeed, part of the Federal Government’s plans to fully commercialise the NNPC, in line with the reforms recommended in the Petroleum Industry Bill (PIB).
Barkido: “In all developing countries, their national oil companies operate across the supply chain, including the strategic downstream sector. And it is not only seen from commercial perspective but also from national security implications.
“You cannot handover the sector to a group of people, private individuals who you cannot predict their political coloration, cannot predict the decision they may take, and the implication of such decision,” he said.
According to The Source’s findings, the NNPC move is aimed at breaking the monopoly of mystery middlemen and the cartels that have been holding the sector and the Nigerian economy down.
“Today, it only needs a text message round the marketing companies that simply says, ‘stop loading in Mosimi for one day’ and you will see the multiplier effect across the country, from Sokoto to Maiduguri. “If they don’t load for one day, you will see queues across the country. Why? They have the monopoly over the supply chain. About 15,000 stations in the country are not owned by the NNPC, nor are they owned by the Product, and Pipelines Marketing Company (PPMC). They are owned by these marketing companies. Once we sell products from the depot, they take over in terms of where they will supply the products” said Barkindo.
Penultimate week, the acute shortage of petroleum products in Abuja, Lagos and other parts of the country worsened following the decision of the Tanker Drivers to stop bridging products from Lagos to Suleja and Abuja.
The drivers, whose demand was for the Federal Government to repair access roads to the depots, had lamented the increasing number of deaths among their members due to multiple road accidents caused by bad roads.
Also, the tanker drivers expressed bitterness over an alleged breach of contract between telecommunication outfit and the Petrol Tanker Owners, This made the Union of Petroleum and Natural Gas Workers (NUPENG) to order them to down tools.
The Source’s findings revealed that the activities of the mafia in the oil and gas sector have not only negatively affected the nation’s oil –based economy, but has also brought about untold hardship on the people.
President Umaru Yar’Adua had in his first address upon assumption of office lamented that the racketeering in the oil and gas sector by an unnamed mafia was the bane of the Nigerian nation and the bastion of the country’s institutional corruption.
This mysterious and faceless mafia has consistently, he said, sabotaged government’s efforts at deregulating the downstream oil sector, resulting in the continued distortion of the supply chain and the lingering crisis of fuel scarcity.
Re-echoing the President’s rage, Minister of Petroleum, Rilwan Lukman, emphasised the need for the NNPC to throw open its process of giving license to fuel importers, so that qualified people and firms can acquire them. Unfortunately, his call was faulted by many people who alleged that it will not be possible due to their vested interests in some oil companies which are the NNPC’s present and/or future customers.
The Source’s finding revealed that the NNPC’s current procedure for awarding fuel import licence is allegedly a mafia-influenced undertating. This is based on the fact that despite the revelation that the Petroleum Minister has vested interest in the sector, President Yar’Adua still went ahead to appoint him. This is said to be how mafia are made and maintained the world over – with one leg in the government and the other outside.
Instructively, the oil mafia came to the fore after the nation’s, refineries were destroyed, thus throwing up their black market as the preferential treatment hitherto enjoyed by the NNPC was reverted to them. Even the NNPC’s right to import about 60 per cent of local fuel demand was outsourced to third parties, who won their licenses through seemingly transparent bidding processes which have produced virtually the same inefficient results.
The Source learnt that Zenon, Sahara Energy, Vitol, Ocean and Oil and Tri Quest have remained the NNPC’s major contractor/importers who are often said to be mobilised, and are entitled to between 10 and 15 per cent profit margin, in addition to demurrage and any cost of importation they may incur.
Meanwhile, at one of the new NNPC filling stations, formerly Rasco Oil along Ikorodu Road, Lagos, The Source observed an increased patronage by motorists. “We believe that they will not adulterate their fuel, or tamper with their pump. Also, they will always have regular supply of fuel, even when it is scarce,” Femi, a commercial bus driver said.
Apart from this, The Source also observed that the pump attendants do not make the illegal demand for N20 or N50 as Jerrycan fees from customers anymore.
The manager of the station, one Alhaji Ganiyu, was, however, not interested in reacting to The Source’s questions but said, “You know the owner of this filling station from the sign board and logo. I cannot answer any of your questions. You can go to the NNPC who will give you all you need to know.”
But another source that craved anonymity told The Source: “Both NNPC and our company are in partnership, which I believe is favourable to both parties. NNPC will make use of our properties, including tankers to make sure fuel is always available even when there is scarcity.
“This partnership will check fuel adulteration, adjustment of pump, et cetera which has not been there before including the illegal Jerry can fee by attendants who may not feel too happy now. I think it will help solve the fuel problem in the country.”
On the availability of tankers to bridge the products to stations in other parts of the country, Mike Mukwuzi of the Corporate Affairs Department of NNPC told The Source that they have enough to move fuel to these filling stations.
Mukwuzi: “The NNPC has enough tankers to move fuel to all its filling stations, both new and old. Remember, there is the tanker drivers union. This registered union is readily available to the corporation to make this new venture successful.”
Meanwhile, the NNPCs commercialisation efforts has raised yet another controversy as the Independent Petroleum Marketers Association of Nigeria (IPMAN) on Thursday, December 4, petitioned the Chairmen, Senate and House of Representatives Committee on Petroleum Resources, Downstream, asking them to review the Petroleum Industry Bill (PIB) which gives the NNPC monopoly over other players in the downstream sector.
The petition which was signed by Mike Osatuyi, national secretary of the association alleged that “Information at our disposal indicates that this section, if passed will give the Nigerian National Petroleum Corporation a monopoly over other stakeholders in the downstream sector and this will take us back to the dark age in the industry.”