Nimex Petroleum has been suspended by Nigeria's fuel regulator for failing to provide documents for shipments, the company said, a move that suggests the West African country may be taking steps to clamp down on subsidy graft estimated to have cost it billions of dollars.
The government department is one of several under fire for overseeing a scheme that paid out large sums in fraudulent subsidy claims for fuel that did not exist or was sold abroad.
Nigeria's corrupt fuel subsidy scheme cost the country $6.8 billion between 2009-2011, according to a parliamentary probe that found damning evidence against the fuel regulator, the Petroleum Products Pricing Regulatory Agency (PPPRA).
Nimex Petroleum confirmed PPPRA had suspended its activities in Nigeria in a letter dated May 3 over missing documentation relating to the delivery of two shipments of around 10,000-12,000 tonnes of gasoline.At current spot market prices, the subsidy payment due for the shipments in question is worth around $10 million.
Nigeria tried in vain to end gasoline subsidies in January, but a week of public protests forced the government to partially re-instate the payments, seen as a drain on its budget. The proportion of the subsidy paid by the regulator remains substantial, accounting for around 40 percent of fuel delivered.
Nimex said it had sent the PPPRA copies of documents rather than originals as requested because the Nigerian banking system was holding the original papers as credit until the subsidy payment was received.
"The originals are in the banking channel," Nimex's general manager Oliver Hess told Reuters, adding the bank would hold the documents until the regulator had paid out the sum due for the shipments.
But the bank would not release the original documents until the regulator had paid the subsidy, Hess said, creating a situation in which the oil firm was going around in circles to obtain the missing documentation requested.
Two Nimex employees were travelling to Nigeria's capital Abuja with most of the original document requested, Hess said, adding the firm hoped to resolve the dispute by Friday. The investigation disclosed that 18 firms never produced the documents required to prove the subsidy funds received from the government tallied with the amount of fuel they had imported.