Fuel theft: NMDPRA, warnings are not enough

THE recent directive by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) ordering filling stations across the country to immediately calibrate and verify their fuel dispensers and totalisers is both timely and necessary. The Authority says it has uncovered incidents of under-dispensing of petroleum products at retail outlets nationwide and has consequently intensified inspections and enforcement activities. It has also warned that persistent or serious violations could attract sanctions, including revocation of operating licences. This is welcome. But warnings are not enough.

Under-dispensing is not simply a technical irregularity or an improperly calibrated machine. Where it is deliberate, it amounts to taking money from consumers for products they did not receive. A motorist who pays for 20 litres but receives 18 litres has effectively been deprived of the value of two litres. Multiplied across hundreds of customers and thousands of transactions, seemingly small discrepancies can translate into substantial illicit gains at the expense of consumers. This practice is particularly unconscionable at a time when Nigerians are paying extraordinarily high prices for petrol. In September, petrol was selling at about ₦1,400 per litre in Lagos and Abuja, with prices reaching about ₦1,500 in some northern locations as higher international crude prices fed into the domestic market. At such prices, every litre matters.

Families are already adjusting household budgets to accommodate transportation and energy costs. Commercial drivers pass higher fuel costs to passengers. Businesses that depend on generators or road transportation incorporate them into the prices of goods and services. Some workers increasingly reconsider whether they can afford to drive regularly. Petrol is therefore not just another commodity: its price reverberates throughout the economy. To make consumers pay these elevated prices and then deny them part of the product purchased is exploitation upon hardship. NMDPRA is right to describe under-dispensing as a serious breach of consumer trust. But the Authority should go beyond directing filling stations to calibrate their own equipment. A regulatory system cannot principally depend upon operators suspected of wrongdoing certifying themselves as compliant. Independent verification is indispensable.

Indeed, under-dispensing is not a new phenomenon. Commercial drivers and motorists in many communities have for years exchanged information about filling stations reputed to give better or poorer value. NMDPRA itself has previously taken enforcement action. In February, 11 filling stations in Rivers State were sealed over infractions including under-dispensing and failed pumps under the Authority’s “Operation One Litre for One Litre” surveillance exercise. In July, two stations in Ogun State were sealed following alleged regulatory violations, including under-dispensing. The question, therefore, is not whether the problem exists. It is whether enforcement can become sufficiently consistent to deter it. NMDPRA should institute continuous, unannounced inspections of filling stations across the country. Inspectors should arrive without prior notification, conduct standard volumetric tests on randomly selected pumps, and document the results electronically. Stations should not know when inspectors are coming or which pumps will be tested. Predictability defeats the purpose of surveillance.

READ ALSO: NMDPRA threatens fuel stations with licence revocation over under-dispensing

There should also be graduated but consequential sanctions. An accidental calibration problem identified and promptly corrected need not be treated in exactly the same manner as deliberate pump manipulation or repeated under-dispensing. But stations found intentionally cheating consumers should face substantial penalties. Repeat offenders should be suspended, and persistent or egregious offenders should lose their licences, as the Authority has warned. That threat will have little deterrent value if no operator believes it will actually be carried out. Enforcement should also be transparent. NMDPRA should periodically publish the number of stations inspected, the number found compliant, the number found under-dispensing, the degree of measurement error detected and the sanctions imposed. Where a station is sanctioned for a proven violation, the public should be informed. Consumers deserve to know which businesses have been found taking their money without supplying the corresponding quantity of product.

There should equally be an accessible consumer-reporting mechanism. Motorists who suspect under-dispensing should be able to report a station quickly, preferably through a dedicated telephone line, mobile platform or online portal, providing the station’s location, pump number, time and receipt where available. Multiple complaints against the same outlet should automatically trigger an inspection. This would effectively turn millions of consumers into an additional layer of market surveillance. The wider context also matters. Government has promoted compressed natural gas (CNG) as a cheaper alternative to petrol, and there has been measurable expansion. Yet, with refuelling facilities spread across only part of the country, CNG is still not a practical substitute for petrol for millions of motorists. For the foreseeable future, therefore, Nigerians will remain heavily exposed to what happens at the petrol pump.

NMDPRA consequently has an obligation not merely to regulate the petroleum industry but to protect the people purchasing its products. The Petroleum Industry Act created the Authority as the regulator of Nigeria’s midstream and downstream petroleum sector. Consumer protection must be treated as a core part of that responsibility, not as an occasional enforcement campaign. The latest directive is therefore a useful beginning, but Nigerians should expect more than another circular. The Authority should make pump verification a permanent feature of downstream regulation, backed by surprise inspections, credible sanctions, transparent reporting and easy consumer complaints. Most importantly, it should make an example of operators deliberately cheating customers. Filling stations that systematically steal from consumers should not merely be warned and told to recalibrate their pumps. Where deliberate or repeated fraud is established, they should be shut down and, where appropriate, have their licences revoked.

At ₦1,400 to ₦1,500 per litre of petrol, Nigerians are already paying dearly enough. They should at least get the full litre they paid for.