Senate probes Obat Oil, others over importation of low-quality diesel, petrol products

The Senate on Wednesday directed its relevant committees to investigate the alleged importation of hazardous petroleum products and dumping of substandard diesel into Nigeria.

The probe, which was raised as a matter of urgent public importance, followed a motion by Senator Asuquo Ekpenyong on Wednesday.

The investigation is to be conducted by an Ad-Hoc Committee with the following terms of reference:

“Examine the pre-shipment and pre-discharge standard test parameters, adopted by the Nigerian Midstream and Downstream Regulatory Authority, with a view to uncovering loopholes, if any, exploited to get toxic cargoes into the country;

“Determine the level of compliance of the NPCL’s Direct Sale and Direct Purchase (DSDP) arrangements in line with the provisions of the Petroleum Industry Act, including the extent of transparency and accountability in the scheme;
(“Beam legislative searchlight on the activities of the Petroleum Equalisation Fund, including payments made to transporters in the last 10 years;

“Enquire from the NPCL the state/ status of the 22 Depots built by the NNPC to eliminate road distribution of petroleum products;

“Engage with stakeholders within the oil and gas industry with a view to identifying possible gaps in regulating and strengthening the surveillance and monitoring structures in place to enable Nigeria detect violations of best practice standards in the importation of products before they enter into domestic supply chains;

“Also engage with the NNPCL with a view to understanding the extent of its determination and timelines for the start-up of Government funded oil refineries; and

“Investigate how institutions across the importation and distribution chain failed to conduct quality sampling, shipped in products without auditing, port validations by the Nigerian Customs Service; Department of Petroleum Resources (DPR); National Maritime Authority (NMA); and Standard Organisation of Nigeria (SON).”

Senator Asuquo in his lead debate noted on 16th June, 2024, 12 diesel cargoes, conveying a total of 660kt of diesel, were exported by refineries to offshore Lome, Togo for further distribution to West African markets, mainly Nigeria.

He lamented that the quality of the said diesel is below the Nigerian standard in terms of flash and Sulphur levels.

He said, “However, in spite of the substandard nature of the diesel, it still finds its way into the Nigerian markets, as & track on Mt “Kallos” which arrived Lome on the 16th of June, which immediately did ship-to-ship (STS) transfer to DV MT (Matric Triumph and then proceeded to discharge into Matric jetty in Warri on 21st June, 2024.

“Thereafter, another STS was made to DV MT “Matric Pride”, which then proceeded to discharge into Obat Oil terminal on 22nd June, 2024.

“The diesel is priced below fair market value, which constitutes dumping on the World Trade Organisation (WTO) rules, which stipulates that countries are permitted to take measures to protect their local industries in the event of dumping.

“The WTO also recognises the impact of dumping on domestic industries, and therefore stipulates tariff regimes such as anti-dumping duties and import rection measures to ensure that domestic producers are not unfairly disadvantaged.”

The lawmaker lamented despite the fact the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently revised the importation standards for diesel into Nigeria in accordance with the Petroleum Industry Act, 2021, “it is evident that they lack the authority to enforce adherence to the regulations.”

Senate President Godswill Akpabio said to ensure transparency, the issues raised within the PIA should be reviewed.

He set up an Ad-hoc committee to investigate how institutions across the importation and distribution chain failed to conduct quality sampling, shipped in products without auditing, port validations by the Nigerian Customs Service, Department of Petroleum Resources (DPR); National Maritime Authority (NMA) and Standard Organisation of Nigeria (SON).

The Adhoc committee consists of the Leader of the Senate, Opeyemi Bamidele (APC, Ekiti Central) as the Chairman while Senators Yahaya Abdullahi (PDP, Kebbi North), Tahir Monguno (APC, Borno North), Solomon Olamilekan (APC, Ogun West), Ipalibo Harry-Banigo (PDP, RIvers West), Khabeeb Mustapha (PDP, Jigawa South-West), Adams Oshiomhole (APC, Edo North) Ipinsagba Emmanuel (APC, Ondo North), Ekong Williams (APC, Cross River Central), Tokunbo Abiru (APC, Lagos East), Osita Izunaso (APC, Imo West), Sahabi Yau (PDP, Zamfara North), Abdul Ningi (PDP, Bauchi Central).

The committee is expected to report back within three weeks.