On 17th January, 2012, the Major Oil Marketer Association of Nigeria (MOMAN) comprising Conoil PLC, Forte Oil PLC, Mobil Oil Nigeria PLC, MRS Oil Nigeria PLC, Total Nigeria PLC and Oando PLC issued a press statement detailing the workings of the current subsidy scheme and their roles and responsibilities. On 24, January, 2012, Oando’s Group Chief Executive appeared before the House of Representatives’ Ad-hoc Committee on Subsidy to clarify Oando’s position.
We have elected to issue this press statement for the benefit of our shareholders, customers, suppliers, partners and employees, to highlight and elucidate Oando’s participation in Nigeria’s fuel subsidy scheme.
- As far back as the mid 1970s, the Nigerian Government through the Nigerian National Petroleum Corporation (NNPC) has subsidised the cost of various petroleum products to petroleum distributors for onward delivery to the general public.
- To ensure private sector participation in the importation and distribution of petroleum products with the view of eliminating the inefficiencies around the delivery of this service to the Nigerian public, the Federal Government set up the Petroleum Support Fund (PSF) in 2006. The PSF is administered by the Petroleum Products Pricing Regulatory Authority (PPPRA) under the supervision of the Ministry of Finance.
- Under the PSF, the private sector and NNPC import PMS into the country at international market prices and sell to consumers at a lower regulated price at the pump.
- PPPRA determines the value of the differential through its pricing template and all payments are subjected to audit by appointed government auditors.
- The PPPRA is set up by the Petroleum Products Pricing Regulatory Agency (Establishment) Act of 2003 and has a 26 member Board. With adequate representation from a broad section of Nigerian stakeholder groups, the board comprises of key government institutions such as the Federal Ministry of Finance (FMF), the Federal Ministry of Petroleum Resources (FMPR), the Central Bank of Nigeria (CBN), the National Bureau of Statistics (NBS); labour unions like the Nigeria Labour Congress (NLC), the National Union of Petroleum & National Gas Workers (NUPENG), the Petroleum & Natural Gas Senior Staff Association of Nigeria (PENGASSEN) and the Trade Union Congress (TUC); employers of labour such as the Nigeria Employers Consultative Association (NECA) and the Manufacturers Association of Nigeria (MAN); representatives of the media, amongst others.
- Oando is the largest private sector and indigenous integrated energy service provider in sub-Saharan Africa. Over the years, we have invested billions of naira in downstream infrastructure, (including reception, storage, distribution facilities and sale outlets) and by our scale; we are the largest importer of PMS next to NNPC. Our downstream assets include:
- Over 550 Retail Outlets across Nigeria
- 6 storage terminals – 150,000 MT of which 83,000 MT is for PMS
- 3 Aviation Depots–3,000MT Combined Capacity
- 2 Lubes Blending Plants – 100m Litres capacity
- 7 LPG Filling Plants – 764 MT combined capacity
- What we have claimed till date is a reimbursement that has been ascertained and audited by relevant government agencies at every step in the value chain. Every single document has been made available to the investigating bodies carrying out the current review.
ANY INSINUATION OR SPECULATION THAT OUR PARTICIPATION IN THE PSF CONSTITUTES AN ILLEGAL ACT OR NEFARIOUS ACTIVITY IS COMPLETELY FALSE. OUR CLAIMS UNDER THE PSF ARE REIMBURSEMENTS FOR COSTS LEGITIMATELY INCURRED BUT OTHERWISE UNRECOVERABLE DUE TO THE LOWER REGULATED SALE PRICE UNDER THE GOVERNMENT’S SUBSIDY INITIATIVE. ALL SUCH COSTS ARE INDEPENDENTLY ASCERTAINED BY THE PPPRA AND DULY AUDITED.
We hereby restate our continuous commitment to ensuring adequate supply of petroleum products to our customers and the consuming public.
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Upstream Division
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Midstream Division
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Downstream Division
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