The house of representatives joint committee on petroleum resources (downstream and midstream) has launched a probe into claims that local refineries, including the Dangote Petroleum Refinery, produce inferior products.
The committee is also investigating the allegations that the
international oil companies (IOCs) in Nigeria are frustrating the survival of
the Dangote refinery.
At the inaugural sitting on Monday, Ikenga Ugochinyere,
chair of petroleum resources downstream committee, said a “thorough and
transparent” probe would be carried out on the claims, including detailed
laboratory investigations at all local refineries, marketers and importers
facilities, and regulatory agencies.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Dangote refinery have been embroiled in a dispute that began recently.
On July 18, Farouk Ahmed, the chief executive officer of
NMDPRA had said local refineries, including the Dangote refinery, were
producing inferior products compared to the ones imported into the country.
The oil regulator also accused the Dangote of monopoly.
Aliko Dangote, CEO of the Dangote Group, has denied both
claims.
Ugochinyere said the committee would further investigate the
“indiscriminate” issuance of licences and importation of refined petroleum
products, return of PMS price intervention, allegation of product
unavailability to marketers from NNPC retail, and endless shifting of timelines
for refinery rehabilitation and the nefarious activities at petrol depots.
“The committee will also conduct a legislative forensic
investigation into the presence of middlemen in crude trading, alleged
unavailability of international standard laboratories to check adulterated
products, influx of contaminated products into the country, the allegation of
non-domestication of profits realized from crude marketing sales in local
banks, abuse of the PFI regime, importation of products already being produced
in Nigeria and use of international trading companies to resell fuel stock to
local refineries at high mark up prices,” Ugochinyere said.
“The two committees were also mandated to carry out a
legislative forensic investigation into the allegation of importation of
substandard products and high-sulphur diesel into Nigeria, the alleged
production of substandard diesel and other petroleum products by some domestic
producers.”
He said the panels will also probe the alleged anomalies in the
importation and distribution of PMS by the state oil company, the economic
viability of the alleged sale of petroleum products below fair market value and
its impact on downstream and local refineries and revenue generation as well as
the source of funds for such price interventions, quantity imported, the amount
spent and why the products are still high in the retailing market.
In addition, the lawmaker said the committee will
investigate the alleged failure of some of the regulators to enforce compliance
on standards, the lack of support to local crude refiners, and the issuance of
import licences, despite local production.
“Following the investigative order given to the committee by
the 10th people’s house, today we are going to officially commence the
comprehensive forensic legislative investigation into several critical issues
that threaten the stability and trust in our petroleum industry,” he said.
‘WE’LL CONDUCT
THOROUGH PROBE’
The lawmaker said the probe will start with addressing
allegations concerning the importation of substandard petroleum products and
the non-availability of crude oil to domestic refineries, which has raised
serious concerns about the quality and safety of fuel in our market.
He said the panel will take a closer look at the integrity
of the testing processes for petroleum products in the country, particularly
focusing on the capacity and credibility of all the testing labs of all
stakeholders in the downstream and midstream value chain, local middlemen and
the laboratories they employ.
Ugochinyere said to ensure a thorough and transparent
investigation, the committee would undertake detailed laboratory investigations
at all local refineries, marketers’ and importers’ facilities, regulatory agencies,
state oil companies, and other players in the sector.
“We will visit
various filling stations, depots, and tank farms to take samples in line with
intl standards, verify the quality of imported products and asses the testing
capacities of all refineries and all refined product handling outfits,” he
said.
“The collection of samples will be done transparently and in
line with global best practices and would be in 4 specimens for independent
testing in a different standard, accredited Laboratory including that of all
stakeholders involved in refining and importation of refined petroleum
products.
“The committee will
select different locations, including filling stations, depots and even
currently discharging ships. Samples shall be taken in the presence of
representatives of NMDPRA, refinery representatives, marketers/importers and
the committee.
“After collection, the samples will be tested jointly and
also independently by the committee and the stakeholders to ascertain the
contents. Component to be tested for as listed as follows: sulfur content,
density, distillation, flash point, octane number for gasoline and cetane
number for diesel.”
‘STAKEHOLDERS WILL BE INVITED’
Ugochinyere said zonal interaction committees would be set
up to ensure “swift movement” to different parts of the country to interact
with stakeholders and take samples from stakeholders’ facilities for immediate
laboratory analysis.
He said invitations would be dispatched on Monday (today)
for submissions of relevant documents and appearances to key stakeholders,
regulatory bodies, state oil companies, petroleum products refining companies,
IPMAN, PETROAN, independent oil producers, IOCs, importers, marketers, depot
owners and other stakeholders too numerous to mention.
“We are committed to transparency, thoroughness, and
accountability throughout this process that will help us to identify and
resolve the underlying issues plaguing Nigeria’s petroleum sector,” Ugochinyere
said.
Therefore, he said the committee resolved that parties in
the raging argument — Dangote refinery, other refining companies, NMDPRA,
marketers and relevant stakeholders — “should henceforth cease further
allegations and counter-allegations pending the conclusion and outcome of the
investigation”.
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