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Fuel crisis looms

Posted by By LOUIS IBA on 2008/03/14 | Views: 627 |

Fuel crisis looms


Managing Director, Capital Oil and Gas Industries Limited, Mr. Ifeanyi Ubah has decried the decision of the Nigerian Port Authority (NPA) to suspend the company and other four independent petroleum marketing firms from discharging products at certain terminals and depots at the port.

•Capital oil boss warns


Managing Director, Capital Oil and Gas Industries Limited, Mr. Ifeanyi Ubah has decried the decision of the Nigerian Port Authority (NPA) to suspend the company and other four independent petroleum marketing firms from discharging products at certain terminals and depots at the port.

According to him, the suspension had disrupted the flow of petroleum products supplies across the country with grave dangers of fuel scarcity and imminent loss of jobs to hundreds of Nigerians employed by the firms.

The other firms affected by the suspension are: Integrated Oil & Gas Limited; Ibafon Oil & Gas Limited; Ibeto Petrochemical Limited; and Wabeco Oil & Gas Limited.
Recently the NPA after a safety audit of the facilities of the five firms had issued the suspension order, saying it found the safety standards at the facilities deficient for preventing or controlling a major or even minor accident and that the suspension would only be lifted when the affected firms raise their safety standards to an acceptable level.

He said the affected firms had incurred huge financial losses in demurrage and cargoes of fuel ordered and paid for abroad, which can no longer sail for Nigeria, given the suspension. He said about $20,000 was paid for a cargo of fuel on a chartered vessel.
“We will put claims forward for all the losses we have incurred,” he said.

Ubah, however queried the right of the NPA to carry out audits on the facilities, insisting it was a breach of the law as only the Department of Petroleum Resources (DPR) had the statutory regulatory powers to licence, inspect, audit, suspend or shut down oil and gas facilities in Nigeria.
He alleged that the NPA’s action “was in bad faith in order to achieve the unlawful purpose of putting the affected operators out of business, in order to favour a particular operator.” He however declined to name the favoured operator.

“It is the duty of the DPR to regulate the importation, discharge, storage and trading of clean petroleum products. NPA has no statutory powers or authority to carry out safety inspection of oil and gas facilities. This is more so that the facilities are not situated in the premises of the NPA or in a place under its statutory or administrative control. NPA is also not statutorily empowered to audit safety standards of petroleum depots,” Ubah said.

According to him, the decision of the NPA was unjustified and insupportable both in law and facts for the following reasons:
“The NPA failed to give the affected companies any notice of the purported safety audit of their facilities. The officials of the NPA simply walked in unannounced at the facilities and informed they wanted to have a look at the various safety facilities in place at the depots. The companies duly conducted them round even though they entertained grave doubts about the propriety of the exercise.

“The NPA never communicated the outcome of its so-called safety audit to the effected companies. It fraudulently failed and refused to give time to the companies to remedy the perceived breach of safety. This NPA woefully failed to do all these not withstanding the great economic importance and relevance of the companies to the economy of Nigeria.”

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