The 15- Member Ad- hoc Committee set up by the Red chamber will also probe the activities of the Petroleum Equalisation Fund (PEF) including payments made to transporters in the last 10 years.
The probe was directed, following a motion on issue of urgent public importance raises by Senator Asuquo Ekpenyong on Wednesday.
The committee will among others, carry out a holistic investigation into the pre-shipment and pre-discharge standard test parameters, adopted by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) with a view to ascertaining whether there are loopholes exploited to get toxic cargoes Ekpenyong into the country.
Also, the committee is to 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.
The terms of reference also include to; Examine the pre-shipment and pre-discharge standard test parameters, adopted by the NMDPRA 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 to 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; as well as 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 Committee has the Senate leader, Senator Opeyemi Bamidele, APC, Ekiti Central as Chairman, Senators Asuquo Ekpenyong, APC, Cross River South; Abdullahi Yahaya, PDP, Kebbi North; Mohammed Tahir Monguno, APC, Borno North; Ipanibo Banigo, PDP, Rivers West; Khabeeb Mustapha, APC, Jigawa South West; Olamilekan Adeola, APC, Ogun West; and Diket Plang, APC, Plateau Central as members.
Others members are Senators Adams Oshiomhole, APC, Edo North; Osita Izunaso, APC, Imo West; Tokunbo Abiru, APC, Lagos East; Sahabi Ya’u, PDP, Zamfara North; Abdul Ningi, PDP, Bauchi Central; Ipinsagba Emmanuel, APC, Ondo North and Ekong Williams, APC, Cross River Central as members.
The committee would be engaging 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.
It is expected to report back within three weeks.
Presenting the matter before the Senate,
Ekpenyong stated that on June 16, 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.”
According to Ekpenyong, despite the fact that the 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.
The Senator noted that in spite of enough local production capacity, NMDPRA has persistently granted import licences for diesel and jet.
According to him, to the extent that our local refineries are able to meet Nigerian demand, a complete prohibition on the importation of diesel is the best way to safeguard Nigerians and the refineries from dumping.
Ekpenyong further stated 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 import licenses in order to address all concerns.
He noted that 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.
He also noted that importing substandard diesel has an impact on both people and machinery because the toxic emissions cause respiratory ailments and other health problems in addition to shortening engine life, which forces drivers to deal with more frequent car and generator breakdowns and associated higher maintenance costs.