News

July 9, 2024

Reps probe cause of petrol scarcity, indiscriminate issuance of licenses

Petrol scarcity

By Gift ChapiOdekina, Abuja

The House of Representatives on Tuesday mandated its Committees on Petroleum Resources (Downstream and Midstream) to investigate the cause of fuel queues across the country and proffer lasting solutions to the challenges.

This followed the adoption of a motion of urgent public importance moved at Tuesday’s plenary by the member representing Orhionmwon/Uhunmwode Federal Constituency, Edo State, Mr Bill Osawaru.

The motion titled, “Urgent need to carry out a legislative forensic investigation into the challenges affecting the downstream and midstream petroleum sectors in Nigeria and other related matters to find out a lasting solution to all challenges being experienced in the sectors and reposition them for efficiency and productivity,” was overwhelmingly endorsed by the lawmakers during plenary.

Leading the debate, Osawaru noted that there has been a resurgence of fuel queues in petrol stations, with allegations of high cost of petrol and non-availability of fuel stock for downstream domestic refineries in Nigeria as well as disruption of distribution of the product.

Consequently, the House mandated the Committees to carry out a legislative forensic investigation into the resurgence of fuel queues in petrol stations, allegations of high cost of PMS, unavailability of fuel stock for downstream domestic refineries, disruption of distribution of PMS products, unfair subsidization of PMS and other petroleum products racketeering and favouritism in the Pro Forma Invoice System (PFI) regime.”

The mandate of the committees also includes probing “The indiscriminate issuance of licenses and importation of refined petroleum products, alleged return of PMS price intervention, allegation of product unavailability to marketers from NNPC Retail, 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 trading, indiscriminate issuance of licenses, unavailability of 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.

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, sale of petroleum products below fair market value and its impact on downstream and local refineries as well as the source of funds for such interventions, the failure of the regulators such as NMDPRA, NUPRC to enforce compliance with standards; the lack of support to local crude refiners, issuance of import license, despite local production, and report back to the House within four weeks for further legislative action.”

Justifying the relevance of the motion, Osawru noted that “There is an allegation of unfair subsidisation of the Petroleum Motor Spirit and other petroleum products which negatively affects competitiveness in the sector. There are also allegations of racketeering and favouritism in the Pro Forma Invoice System regime, indiscriminate issuance of licenses and importation of refined petroleum products.

‘The House is informed of the alleged return of PMS price intervention with its impact on the domestic market, as well as the allegation of product unavailability to marketers from NNPCL Retail. This is in addition to the endless shifting of timelines for refinery rehabilitation, and the nefarious activities at petrol depots which have affected product distribution and caused scarcity. There is also the use of middlemen in trading which has negatively affected domestic crude supply.”

According to the lawmaker, there are claims that subsidy has returned on petrol, including lack of clarity about the exact landing cost of PMS, reduction in retail price and its impact on downstream operations, allegation of importation of substandard products and high-sulphur diesel into Nigeria, among others.

That said, Osawaru blamed the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Nigerian Upstream Petroleum Regulatory Commission for failing in their regulatory roles, which he said, is partly responsible for the current scarcity.”