The Nigerian Senate has decided to investigate the Nigerian National Petroleum Corporation Limited (NNPCL) over the continued importation of hazardous petroleum products, particularly substandard diesel, into the country. This move comes after growing concerns about the harmful effects of these products on public health and the environment. Additionally, the Senate has expressed frustration with the state of Nigeria’s government-owned refineries, which have been in a state of disrepair despite significant investments, including over $4 billion recently spent on them, and repeated promises made by NNPCL regarding their repairs and modernization.
In response to these concerns, the Senate has formed a 15-member ad hoc committee tasked with conducting a thorough investigation of the oil and gas sector. The committee will report back to the Senate in three weeks with its findings. Senator Opeyemi Bamidele, the Senate Leader, will chair the committee, and its members will include Senators from various political parties, including Senators Asuquo Ekoenyong, Abdullahi Yahaya, and Adams Oshiomhole.
The investigation stems from a motion raised by Senator Asuquo Ekpenyong, representing Cross River South. Senator Ekpenyong expressed deep concern over the ongoing importation of hazardous petroleum products, particularly diesel, into Nigeria. According to the motion, the diesel being imported into the country has been found to be of substandard quality. He highlighted an incident that occurred on June 16, 2024, where 12 cargo ships carrying a total of 660,000 metric tons of diesel were reported to have been exported by refineries to offshore Lome, Togo. From there, the diesel was distributed to various West African markets, including Nigeria.
Despite the substandard nature of the diesel, it was reported that the fuel still found its way into the Nigerian market. The diesel was offloaded in Warri, a major oil city in Nigeria, and subsequently transferred to another vessel, the “Matric Pride,” before being discharged at the Obet Oil terminal in June 2024. The diesel in question was priced well below the fair market value, which raises concerns about the practice of dumping. Dumping refers to the sale of products at unfairly low prices in foreign markets, often in violation of World Trade Organization (WTO) rules. The WTO allows countries to take measures to protect their local industries against such practices, and Senator Ekpenyong believes that Nigeria needs to take stronger action to protect its local markets from this type of economic harm.
Furthermore, the motion pointed out that although the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has recently revised the standards for diesel imports in accordance with the Petroleum Industry Act (PIA) of 2021, it is evident that the regulatory body has been ineffective in enforcing these standards. The NMDPRA has continued to issue import licenses for diesel and jet fuel, even though there is sufficient local production capacity to meet Nigeria’s fuel needs.
Senator Ekpenyong’s motion called for a total ban on the importation of diesel, as Nigeria’s local refineries should be able to meet the country’s demand for this product. This suggestion was endorsed by the Senate, which subsequently tasked the ad hoc committee with investigating the matter in more detail. One of the key areas the committee will focus on is the pre-shipment and pre-discharge testing of diesel imports. These tests are meant to ensure that the fuel meets quality standards before it enters the country. The committee will examine whether there are any loopholes in this process that may be exploited to import substandard or toxic products into Nigeria.
Another key focus of the investigation will be the Direct Sale and Direct Purchase (DSDP) arrangements made by NNPCL. Under these arrangements, NNPCL is supposed to engage in transparent and accountable transactions with suppliers of petroleum products. The committee will look into the compliance of NNPCL with the provisions of the Petroleum Industry Act, especially with regard to transparency in its dealings with suppliers. The committee will also investigate the level of accountability in the scheme and whether the process has been carried out according to the law.
The Senate committee will also review the activities of the Petroleum Equalisation Fund (PEF), which is responsible for ensuring that the prices of petroleum products remain stable across the country. The PEF has been in operation for several years, but there have been concerns about the transparency and effectiveness of its operations, especially regarding payments made to transporters in the past decade. The committee will look into these payments and assess whether they have been properly managed.
Furthermore, the Senate committee will inquire about the state of the 22 depots that were built by NNPC in the past to reduce the reliance on road distribution of petroleum products. These depots were intended to improve the efficiency of petroleum product distribution in the country, but it is unclear what state they are in today. The committee will investigate the status of these depots and whether they are being utilized effectively or if they have fallen into disrepair.
Finally, the committee will engage with stakeholders in the oil and gas industry to identify any gaps in the current regulatory framework. This will include looking at ways to improve the surveillance and monitoring systems in place to detect violations of best practices in the importation of petroleum products. Strengthening these systems is seen as crucial in preventing the importation of toxic and substandard products into the country, which could pose a threat to the health of Nigerians and damage the environment.
The investigation is a significant step in addressing long-standing issues in Nigeria’s oil and gas sector, particularly concerning the importation of hazardous diesel and the state of the country’s refineries. Over the years, the Nigerian government has made numerous promises to repair and modernize its refineries, but progress has been slow, and the refineries continue to operate below capacity or are completely idle. The Senate’s decision to probe NNPCL and other relevant bodies is an attempt to hold those in charge accountable and ensure that the oil and gas sector is properly regulated.
As Nigeria continues to rely heavily on imports for its petroleum products, there is a growing concern about the sustainability of this approach. The Senate’s investigation could potentially lead to significant reforms in the industry, including a reduction in the importation of substandard products and a more robust regulatory framework. However, the success of these efforts will depend on the willingness of government agencies and the NNPCL to cooperate with the investigation and take the necessary steps to address the issues raised.
In conclusion, the Senate’s decision to probe the NNPCL and the oil and gas sector is a crucial development in the ongoing efforts to improve Nigeria’s energy security and protect the public from harmful petroleum products. The ad hoc committee’s investigation will be closely watched by Nigerians, who hope that it will lead to concrete actions that will benefit the country in the long term.
