Subsidy probe: Integrated Oil rejects N13bn refund
LAGOS-Chairman of the Integrated Oil and Gas Ltd., Capt. Emmanuel Ihenacho, has rejected the report presented by the Hon Farouk Lawan-led, House ad hoc committee on the subsidy regime management of the oil subsidy.
The report, which was leaked to the public last week, ordered some 69 oil marketing companies to refund the sum of N229.7billion, including Integrated Oil, which is to refund N13billion.
Ihenacho said, “We totally and completely repudiate the substance of the report, our firm is not involved in any fraud or whatsoever, and our company has not received any money that it is not entitled to it.”
He also noted that the company is involved in the Petroleum Products Pricing Regulatory Agency, PPPRA’s Premium Motor Spirit, PMS Programe, to import petrol on behalf of the Federal Government using money borrowed from banks.
“Each and every transaction that we do is well documented by the banks that we have borrowed money from, because the size of the funding is such that no tank farm can, on its own, find the resources to fund the product and land it in the market.”
He further explained that the PPPRA must give oil marketers the authorisation to import before starting off, adding that oil marketers usually drew up a template of all the costs that will be incurred, with which they used in applying for bank facilities.
As a result he insisted, “We certainly do not owe anyone anything at all, not to talk about the ‘imaginary’ N13billion so glibly reproduced in the context of the ‘blackmail’ being paraded as news.
“We state unequivocally that we have not drawn any benefits from the subsidy regime other than the payment refunds, which are legitimately due to us and such payments are on account of monies which we have spent upfront on account of gasoline (petrol) imports procured under the PPPRA’s PSF programme.”
Iheanacho, who was apparently agitated by the idea of the N13billion refund, argued that if anything, the import programme was more of a loss than profit making, as according to him, for every naira the company received per litre as PSF refund, it usually spent more than N2/L as interest on bank loans.
“It is also on record that the gasoline import business is a very risky, low margin business involving the shouldering of risks by the importer, not ordinarily provided for in the PPPRA importation template. In the allocation of returns on the import business, all stakeholders get paid before the importer, who frequently makes a loss as a result of the intervention of the extraordinary risks which appertain to the business,” he said heatedly.
He recalled that when invited by the House Committee to give evidence at public hearing on the subsidy probe, his company fully co-operated, openly and publicly, addressing all issues of interest to the committee.
“At no time during the course of our testimony or thereafter were we informed or given the impression that there was anything amiss in relation to the presentation that we had given, or in relation to a requirement to reconcile the figures which we had presented. We still have our records which are open to review at any time by any interested party.
“We have no apologies to make for co-operating with the PPPRA and the Federal Government in this manner since we believe it is our patriotic duty to continue to contribute our quota to national development through our participation in the scheme.”
Ironically, Ihenacho noted that the PPPRA still owed his company billions of naira for outstanding refunds, even as bank interest charges continue rise.