Senate sets up Ad-hoc committee to investigate importation of adulterated diesel into Nigeria

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By Haruna Salami

Senate at its plenary on Wednesday set up an Ad-hoc committee to investigate importation of adulterated diesel and fuel into the country to undermine the economic prosperity of the country.

Senate President Godswill Akpabio who announced the 15-man committee appointed the Senate Leader, Opeyemi Bamidele (Ekiti Central) as the chairman.

Senate decision was sequel to adoption of a motion on “Need to investigate the continued Importation of hazardous petroleum products and dumping of substandard Diesel into Nigeria” sponsored by Senator Asuquo Ekpeyong (Cross River South).

Senator Ekpeyong noted with deep concern the continued importation of hazardous petroleum product and dumping of substandard diesel into the Nigeria;

He observed that on 16th June, 2024, it was reported that 12 diesel cargoes, conveying a total of 660kt of diesel was exported by refineries to offshore Lome, Togo for further distribution to West African markets, mainly Nigeria;

“Also notes that the quality of the said diesel is below the Nigerian standard in terms of flash and Sulphur levels. However, in spite of the substandard nature of the diesel, it still finds its way into the Nigerian markets, as a 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;

He noted that 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 restriction measures to ensure that domestic producers are not unfairly disadvantaged;

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“Aware that even though the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has recently revised the standards of diesel importation into Nigeria in line with the Petroleum Industry Act, 2021, it is apparent that they are incapable of enforcing compliance with the standards;

“Also aware that NMDPRA has persistently continue to issue import licenses for diesel and jet, despite sufficient local production capacity. Therefore, the best also option for protecting Nigerians and our local refineries against dumping is to place a total ban on the importation of diesel in so far as our local refineries can meet the Nigerian demands;

“Further aware that the said ban on importation of diesel will be beneficial to the Nigerian petroleum Industry and indeed the entire nation, and as such, the NMDPRA should cease to issue import licenses in order to address all concerns. However, if the situation is allowed to continue, local production will have no option than to stop the commissioning of gasoline units and shutdown refineries until regulatory environment improves. This is against the backdrop that local production has been able to sell on 20kt of jet fuel in the last 3 months, relative to local demand of 180kt over the same period”.

Contributing to the motion, Senator Solomon Olamilekan (Ogun West), chairman Senate Committee on Appropriation expressed disappointment with the operation of if the Petroleum Industry Act (PIA) by some government officials in the petroleum and gas sector, adding that “heads must roll” as the upper chamber hopes to carry out a major reform.

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According to the Ogun West senator, “there are some information we can’t share here”.

The Senate Chief Whip, Ali Ndume in his contribution, said Dangote has complained loudly that if he had known the problems that he was going to encounter, he wouldn’t have started the Dangote Refinery as he is being frustrated locally in addition to that of the international oil companies (OIC).

He said the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issues licences to import adulterated foreign diesel deliberately to put Dangote out of business, adding that the Ad-hoc committee should find out why Dangote Refinery is forced to sell its diesel outside the country while toxic diesel is imported into Nigeria at the same time.

The Senate after thorough debate on the motion on urgent national importance, accordingly resolves to set up an Ad-Hoc Committee to “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”.

Other prayers of the motion, which now forms the terms of reference for the Ad-hoc committee are as follow:

“Determine the level of compliance of the NNPCL’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 NNPCL the state/status of the 22 Depots built by the NNPC to eliminate road distribution of petroleum products;

See also  Dangote Refinery makes case for 100% Nigerian crude …as Senate probes alleged sabotage in petroleum industry By Our Correspondent The Dangote Refinery has made passionate appeal to the Senate, NNPCL, NUPRC, NDMPRA and other stakeholders in the industry to help supply the refinery its crude oil need 100 per cent from Nigeria. Group Strategy Officer, Dangote Refinery, Aliyu Suleiman made the appeal at the Senate Ad-hoc Committee probing alleged economic sabotage in petroleum industry at the Senate Complex, Abuja on Wednesday. He said right now, the refinery bought about 50 million barrels of crude out of which about 60% comes from NNPC. Mr. Suleiman who expressed gratitude to NNPC for their support, added that, essentially, all they are asking is for them to get their crude requirement from Nigeria 100%. “Let's be very clear, we are happy to pay fair prices. We hope that we'll work with the regulator and we'll get their support so that the refinery can get 100% of its crude from Nigeria and buy the crude from companies that produce it in Nigeria not from international middlemen. “We count on support of the committee, the regulators and other stakeholders to ensure that the refinery succeeds, because if it does, aside from the other obvious benefits, like forex generation, job creation and the rest, most importantly, there is the psychological benefit of making, giving Nigerians, Africa in general, the confidence that we can succeed. Giving a progress update on the refinery, Mr. Suleiman said since the refinery started full trial production in January and then full time production started in March, we processed about 50 million barrels of crude. “We have produced about five million tons of petroleum products. And these petroleum products have been sold to various parts of the country and Jet oil has been sold in Europe since May. He said other products have been sent to places as far as Asia, US, Brazil, and so on. So the refinery has been making a lot of progress. He emphasized the importance of deliberately protecting local industries for the over all economic development of the country. According to him, “the US, for example, has done that, to protect their own industries against attack by China that subsidize their own industries and then sends them to the US. So that's the first question. We want to urge the committee to consider if we deserve protection against them”. He posed three basic questions that revolved around protection of local industries for the consideration of the committee and Nigerians at large. The questions are: “Do local refineries deserve protection from NUPRC? “Should Nigeria protect its infant industries in order to improve investment? “Should local refineries have preferential access to Nigerian crude? He said Dangote found itself competing against Russian products that were produced with oil that is valued at $60. “We all know that because of the cap that has been put Russian oil, the value of Russian oil today in the market is $60. And that's what Russia is using to produce their products and those products are being sent in large quantities into Africa to compete with products that are produced in refineries that buy crude at $90. “We don't think this will be a fair competitive environment and I think that when you have such unfair competition, it is normal to put protective measures. “I think even in the animal world, the moment a new baby is born, they don't just go and leave it out in the wild. “What we want is to sell more of our products in Nigeria, because we believe we can do that, we can compete. And even though there are concerns that have been expressed around monopoly, that is a problem that has been identified. The right thing to do is to say, how do we address this problem? If monopoly is a risk, how do we address this risk while at the same time ensuring that we protect our domestic industries? The good thing is that in the PIA, there are provisions around that, you can monitor and take action if you feel there's monopoly.

“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)”.

Members of the committee include Senators Asuquo Ekpeyong (Cross River South), Abdullahi Yahaya (Kebbi ), Tahir Monguno (Borno North), Solomon Olamilekan (Ogun West), Diket Plang (Plateau South), Ipalibo Banigo (Rivers West), Saliu Mustapha (Kwara Central), Adams Oshiomhole (Edo North), Adetekumbo Abiru (Lagos East), Osita Izunaso (Imo West), Sahabi Ya’u (Zamfara North), Abdul Ningi (Bauchi Central).

The committee has three weeks to submit its report before the Senate proceeds on its annual recess at the end of July, 2024.

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