Ban on importation best way to prevent dumping of substandard petroleum products — Senate Committee

…Begins probe, sets up 15-member investigative committee

The Senate Committee investigating the importation of hazardous petroleum products and dumping of substandard diesel into Nigeria has stated that a ban on importation is the best way to prevent dumping of substandard petroleum products.

Senator Asuquo Ekpeyong, APC, Cross River South a member of the committee made this known at the plenary.

Asuquo sponsored the resolution titled “Urgent Need to investigate the continued importation of Hazardous Petroleum Products and dumping of substandard Diesel into Nigeria.”

Senator Asuquo Ekpenyong noted that 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.

Ekpenyong 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 Senator emphasised that, despite the fact that 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.

He claims that in spite of enough local production capacity, NMDPRA has persisted in granting 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 said 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 licences 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 the regulatory environment improves.”

Speaking on the health effects, he emphasised 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.

He also raised concerns about the lack of proper protection and regulation against dumping, or exporting goods below fair market value, which would hinder the expansion and sustainability of domestic refineries and result in job losses and a downturn in the economy.

Commenting on the issue, the President of the Senate, Senator Godswill Akpabio said that in order to ensure transparency, the issues raised within the PIA should be reviewed.

The Senate therefore set up a 15- Member Ad- hoc Committee to carry out a holistic investigation into 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.

The Senate President charged the committee with the responsibility of determining the level of compliance of the Nigerian National Petroleum Company Limited, 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.

According to the Senate, the Ad-hoc Committee will beam legislative searchlight on the activities of the Petroleum Equalisation Fund, including payments made to transporters in the last 10 years, just as it will enquire from the NNPCL the state/status of the 22 Depots built by the NNPC to eliminate road distribution of petroleum products.

The Committee in carrying out its functions, would 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.

The Committee will 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 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 which has the Senate leader, Senator Opeyemi Bamidele, APC, Ekiti Central as Chairman, has 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 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 is expected to report back within 3 weeks.