Representatives to begin investigation into downstream and midstream sectors

The House of Representatives on Tuesday set up a special committee to conduct a legislative inquiry into the challenges facing the downstream and midstream petrochemical sectors in Nigeria and other related issues. The inquiry will seek lasting solutions to all the problems faced by these sectors and to align them with the needs of efficiency and productivity.

The resolution was passed following the passage of a motion jointly sponsored by Hon. Billy Osawaru and the Deputy Chairman of the House of Representatives Committee on Media and Public Affairs, Hon. Phillip Agbese.

To this end, the House has authorised the Chairman of the Committee on Petroleum (Downstream) of the House, Hon. Ikenga Ugochinyere to lead an inquiry hearing into the renewed increase in fuel queues at petrol stations, allegations of high PMS costs, unavailability of fuel stocks to domestic downstream refineries, disruption in the distribution of PMS products, unfair subsidisation of PMS and other petroleum products, extortion and favouritism in the Pro Forma Invoice System (PFI), disorderly issuance and importation of refined petroleum products, alleged reversal of PMS price intervention, allegation of unavailability of product to NNPC Retail vendors, endless postponement of refinery refurbishment schedules, malpractice at fuel depots.

The Special Committee is also expected to conduct legislative enquiries into the presence of middlemen in the trade, uncontrolled issuance of licenses, lack of availability of laboratories to check adulterated products, inflow of adulterated products into the country, allegations of under-repayment of profits earned from sale of crude oil to local banks, abuse of the PFI system, importation of products already produced in Nigeria, use of international trading companies to resell fuel stocks to local refineries, allegation of refund of subsidy on PMS end products, uncertainty about the exact cost of landing PMS, reduction in retail price and its impact on end operations.

In his keynote speech, Hon. Osawaru noted that the National Assembly was charged with the task of making laws for the peace, order and good governance of the Federation or any part thereof as provided in Section 4(2) of the 1999 Constitution (as amended), emphasising the need to ensure accountability of public resources.

“The House further notes that Section 88 (1) and (2) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) empowers the National Assembly to conduct inquiries into the activities of any organ exercising or administering laws made by the National Assembly.

“The Chamber is aware that in recent times, there have been renewed queues for fuel at petrol stations. There have been allegations of high PMS costs and lack of availability of fuel stocks for domestic refineries in Nigeria, as well as disruptions in the distribution of PMS products.

“The Chamber was informed that there is also an allegation of unfair subsidisation of PMS and other petroleum products, which adversely affects competitiveness in the sector. There are also allegations of extortion and favouritism in the Pro Forma Invoice System (PFI), disorderly issuance of licences and import of refined petroleum products.

“The House is further informed of the alleged return of PMS price intervention and its impact on the domestic market, there is also the allegation of unavailability of the product to NNPC retailers. The endless postponement of refinery renovation schedules and nefarious activities in the petrol depot which have affected the distribution of the product and caused shortage. There is also the use of middlemen in the trade which has adversely affected the domestic supply of crude oil.

“The House is concerned about the haphazard issuance of licenses, lack of laboratories that can check for adulterated products and the influx of adulterated products into the country, allegations of depletion of profits made from the sale of crude oil in local banks, abuse of the PFI system, importation of products already produced in Nigeria such as aviation fuel, AGO.

“The Chamber is also concerned about the allegation of refund of subsidy on downstream PMS products, lack of clarity on the exact cost of landing PMS, reduction in retail price and its impact on downstream operations, 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, and the source of funds for such interventions.

“The Chamber is concerned about the inability of regulatory bodies like NMDPRA, NUPRC etc. to enforce compliance with norms that will help the downstream sector grow, as well as the lack of support for local oil refineries and issuance of import licenses despite local production,” he noted.

Similarly, the House directed the Committee to conduct a legislative inquiry into the allegations of importation of sub-standard products and high sulphur diesel into Nigeria, sale of petroleum products below fair market value and the impact thereof on upstream and local refineries and the source of funds for such interventions, failure of regulatory bodies like NMDPRA, NUPRC etc. to enforce compliance with standards, lack of support to local petroleum refineries, issuance of import licenses despite local production and report back to the House within four weeks for further legislative action.

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