Reps to launch probe into downstream, midstream sectors

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House of Representatives on Tuesday, set up a special Committee that will carry out a legislative forensic investigation into the challenges affecting the Downstream and Midstream Petroleum sectors in Nigeria and other related matters with a view to finding a lasting solution to all the challenges being experienced in the sectors and repositioning them for efficiency and productivity.

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

To this end, the House mandated Chairman, House Committee on Petroleum (Downstream), Hon. Ikenga Ugochinyere to lead the investigative hearing 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, 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, the nefarious activities at petrol depots.

The Special Committee is also expected to carry out a legislative forensic investigation into the presence of middlemen in trading, indiscriminate issuance of licenses, unavailability of laboratories to check adulterated products, influx of adulterated products into the country, allegation of non-domestication of profits realised from crude marketing sales in local banks, abuse of the PFI regime, importation of products already being produced in Nigeria, use of international trading companies to resell fuel stock to local refineries, the allegation of return of subsidy on downstream PMS products, unclarity about the exact landing cost of PMS, reduction in retail price and its impact on downstream operations.

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

“The House further notes section 88 (1) and (2) of the Constitution of the Federal Republic of Nigeria, 1999 (As Amended) empowers the National Assembly to conduct investigations into the activities of any authority executing or administering laws made by the National Assembly.

“The House is aware that in recent times there has been a resurgence of fuel queues in petrol stations, with allegations of high cost of PMS and nonavailability of fuel stock for downstream domestic refineries in Nigeria and disruption of distribution of PMS products.

“The House is informed that there is also allegation of unfair subsidization of PMS 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 (PFI) regime, indiscriminate issuance of licenses, and importation of refined petroleum products.

“The House is further Informed of the alleged return of PMS price intervention with its impact on domestic market, there is also the allegation of product unavailability to marketers from NNPC Retail. Endless shifting of timelines for refinery rehabilitation, and the nefarious activities at petrol depot which have affected product distribution and caused scarcity. There is also the use of middlemen in trading which has negatively affected domestic crude supply.

“The House is disturbed about the indiscriminate issuance of licenses, the unavailability of laboratories to check adulterated products and the influx of adulterated products into the country, allegation of non-domestication of profits realised from crude marketing sales in local banks, abuse of the PFI regime, importation of products already being produced in Nigeria like Jet fuel, AGO.

“The House is also disturbed about the allegation of the return of subsidy on downstream PMS products, unclarity 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-sulfur diesel into Nigeria, sale of petroleum products below fair market value and its impact on downstream and local refineries and as the source of funds for such interventions.

“The House is worried about the failure of the regulators such as NMDPRA, NUPRC, etc to enforce compliance with standards that will help achieve the growth of downstream sector and the lack of support to local crude refiners, issuance of import license, despite local production,” he noted.

Similarly, the House mandated the Committee to carry 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 and as the source of funds for such interventions, the failure of the regulators such as NMDPRA, NUPRC, etc 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.

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