Amidst resurging petrol queues in States across the country, the National Assembly on Friday, August 9, constituted a Joint ad-hoc Committee to investigate economic sabotage within the petroleum sector in the country. According to a statement by the House of Representatives spokesman, Hon. Akin Rotimi, the Speaker of the House, Rt. Hon. Tajudeen Abbas has appointed seven members of the House into the Committee, with the Leader of the House, Hon. Julius Ihonvbere as Co-Chairman of the Committee. Members of the Committee include: Hon. Iduma Ighariwey, Hon. Gboyega Isiaka, Hon. Sada Soli, Hon. Fatima Talba, Hon. Tunji Raheem and Hon. Patrick Umoh. The Speaker emphasised the urgency and importance of the mandate of the Committee and highlighted the necessity of a close collaboration between the Senate and the House of Representatives on the matter. Prior to this development, the House of Representatives dissolved its Joint ad-hoc Downstream and Midstream Committee headed by Hon. Ikenga Ugochinyere, Chairman of the House Committee on Petroleum (Downstream), which was set up to investigate issues related to the importation of adulterated petroleum products, non-availability of crude oil for domestic refineries and other critical energy security issues. According to news reports, the Committee had been enmeshed in controversy, with some members calling for the sack of the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari and others distancing themselves from the call. The new Committee is expected to commence work immediately, with the aim to ensure accountability and transparency in the sector.
The opaqueness of operations within Nigeria’s petroleum industry has lingered, with subsidy being the biggest controversy over several decades. With Nigeria’s refineries being moribund, the country has relied heavily on importing finished products from other locations around the world with refining facilities. In more recent times, the incidence of crude oil theft has risen to an astronomical level, making it difficult for Nigeria to meet its crude oil production quota as stipulated by the Organisation of Petroleum Exporting Countries (OPEC). Between exporting crude oil for refining overseas and serving debts (oil swaps) with certain portions of the limited quantity produced, Nigeria is now in a quagmire over crude oil supply for local refineries.
The Dangote Refinery described as the world’s largest single train refinery (650,000 barrels per day) was touted in some quarters of the country as a game changer in the oil industry, as refining within the country will mean eliminating importation costs and perhaps, selling finished products at more affordable prices. This need to resuscitate local refining was more pronounced when President Bola Tinubu removed subsidy on petroleum products, making consumers purchase these products at full price. However, an unexpected scenario is playing out, where the Dangote refinery is in a broil with the Federal Government and its agencies in the petroleum sector over sourcing crude oil locally for refining. After several postponements of the commencement of the refinery’s operations, sourcing crude oil appears to be a major challenge according to the information made available to the public by the management of the Dangote Group. On August 9, the refinery released a statement to the effect that out of the 29 million barrels of crude oil allocated to it by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for the first half of 2024, only one cargo was supplied, and that the refinery has had to source for crude oil from international traders. It also added that the NUPRC has stated ‘sanctity of contract’ as reason for not fulfilling its obligation under the Petroleum Industry Act, to make crude oil available for Nigerian refineries.
The Federal Executive Council (FEC) on Monday, July 29 directed the NNPCL to provide crude oil to Dangote Refinery and other Nigerian refineries, with the transactions conducted in Naira. It is yet to be seen if this will address the prevailing challenges.
The President of the Dangote Group, Aliko Dangote had earlier stated that the Dangote Refinery would commence production of petrol between August 10 and 12, 2024. However, this is yet to happen. Likewise, the Port Harcourt Refining company under management of the NNPCL has for the sixth time failed to commence operations after various dates were announced for the commencement of its operations, the latest being early August 2024.
In the course of investigations of recent developments within the oil sector, including the rift between the Dangote Refinery and the Federal Government, the leadership of the House of Representatives paid a visit to the Refinery located in the Eko Atlantic area of Lagos State. Previous investigations of the oil industry by National Assembly Committees have underscored the inadequacies within the industry. One of such investigations was carried out by the House of Representatives ad-hoc Committee set up to investigate the volume of fuel consumed daily in the country in the 9th National Assembly. The Committee’s report revealed that Nigeria petrol import and daily consumption is unknown as various stakeholders within the industry had their respective records which varied significantly. It is unclear which of these records was used to calculate petrol subsidy. Despite these discrepancies and other incriminating findings, not much has been seen in terms of holding people accountable or improving the operations within the oil and gas sector for the benefit of Nigerians.