The House of Representatives’ Joint Committee on Petroleum Resources (Midstream and Downstream) has asked Nigerian stakeholders and oil companies to submit proposals highlighting how to address the influx of adulterated fuel products into Nigeria, among other issues.
The call was made in a press release published on the committee’s Facebook page on Thursday, August 1.
The proposals or memoranda are needed ahead of the lawmakers’ public hearing, following the committee’s forensic investigation into the challenges affecting the midstream and downstream petroleum sectors in Nigeria.
Comprehensive Investigation into the Oil and Gas Sector
Nairametrics previously reported the lawmakers saying that allegations of non-availability and non-supply of crude oil to domestic refineries in Nigeria raise concerns about the quality of fuel in Nigerian markets.
Chairman of the Joint Committee of the House, Ikenga Imo Ugochinyere, disclosed this to newsmen in Abuja.
The joint committee is investigating allegations of production and importation of substandard fuel products and non-supply of crude to domestic refineries.
In its press release, signed by Rep. Akin Rotimi, Jr., Spokesman for the House of Representatives, the initiative is empowered by Sections 88 and 89 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), which authorizes the National Assembly to conduct investigations.
The investigation follows a resolution of the House on July 9, 2024, mandating the inquiry to address issues within these critical sectors.
“In view of this, the Joint Committee (Midstream and Downstream) invites stakeholders, petroleum industry experts, private oil companies, and the general public to submit memoranda to assist in this comprehensive investigation,” the statement partly reads.
Issues each proposal should address include:
- Resurgence of fuel queues at petrol stations;
- Unavailability of fuel stock for downstream domestic refineries;
- Disruption of the distribution of PMS products;
- Unfair subsidization of PMS and other petroleum products, racketeering, and favoritism in the Pro Forma Invoice (PFI) system;
- Indiscriminate issuance of licenses and importation of refined petroleum products;
- Alleged return of PMS price intervention;
- Allegation of product unavailability to marketers from NNPC Retail;
- Endless shifting of timelines for refinery rehabilitation, and nefarious activities at petrol depots;
- Unavailability of laboratories to check adulterated products;
- The influx of adulterated products into the country;
- Allegation of non-domestication of profits realized from crude marketing sales in local banks, and abuse of the PFI regime;
- Importation of products already being produced in Nigeria;
- Use of international trading companies to resell fuel stock to local refineries;
- Allegation of the return of subsidy on downstream PMS products;
- Unclarity about the exact landing cost of PMS;
- Reduction in retail price and its impact on downstream operations;
- Allegation of importation of substandard products and high-sulphur diesel into Nigeria;
- Sale of petroleum products below fair market value impacting downstream and local refineries, and sources of funds for price interventions;
- Lack of support for local crude refiners;
- High cost of Premium Motor Spirit (PMS) and lack of clarity on PMS landing costs;
- Allegations of unfair subsidization, racketeering, favoritism in the Pro Forma Invoice (PFI) system, and abuse of the PFI regime;
- Presence of middlemen in trading;
- Importation of locally produced products like jet fuel and AGO;
- Alleged return of PMS subsidy and issues surrounding the subsidy regime;
- Importation of substandard/high-sulphur diesel;
- Failure of regulators like the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to enforce compliance and standards;
- Forward sales, revenue from it, and its impact on domestic crude availability;
- Sustainability of the ongoing endless turnaround maintenance of refineries;
- Alleged non-completion of the merger of OVH and NNPCL retail, and other challenges in the merger;
- Allegation of introduction of monopoly in petroleum products production;
- Sharp practices at depots and non-availability of petroleum products after payment;
- Main causes of fuel availability crises, high costs, and alleged racketeering by marketers;
- Demand for a ban on the importation of PMS and other petroleum products.
The lawmakers stressed that the memoranda should highlight concerns, challenges, and proposed solutions to the issues.
“Submissions must be delivered in 10 hard copies, accompanied by two flash drives, to the office of the Clerk, Committee on Petroleum Resources (Downstream), Room HB. 44, White House, National Assembly, Abuja, by Wednesday, August 14, 2024.
“Digital submissions can be sent to house.petroleumresources@nass.gov.ng,” the statement reads.
What You Should Know
Aliko Dangote had challenged regulators, including the NMDPRA, to come to the refinery and examine the quality of their products amid allegations levelled against him regarding monopoly over the oil and gas sector.
The African richest man noted that while other filling stations have flashpoints as low as 26, their products maintain a flashpoint of 96.
His refinery in Lagos also raised issues concerning a shortage of supply from Nigeria’s regulators.
Dangote and other oil sector regulators and NNPCL chiefs later met to reach a truce.
Later, the Federal Executive Council approved President Tinubu’s proposal to sell crude oil to Dangote Refinery and other upcoming refineries in Naira.
The landmark announcement by the federal government is aimed at stabilizing fuel pump prices and the dollar-Naira exchange rate.
Backstory
Earlier, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) alleged that the Dangote Refinery was producing inferior products compared to imported ones.
Farouk Ahmed, the head of NMDPRA, made this claim, stating that the quality of diesel produced by Dangote was 665 ppm, which he considered inferior.
Ahmed’s statement sparked a significant public backlash. Many people found his remarks unacceptable, arguing that they undermined a major local industry and did not reflect the true quality of the refinery’s products.
In response, Dangote invited regulators to test their products. The company claims that they are producing better-quality products than most filling stations across Nigeria, confidently standing by the superior quality of their output.