The House of Representatives on Wednesday tasked the Federal Government on the urgent need to conduct a forensic audit of the Nigeria National Petroleum Corporation Limited (NNPCL) with the aim of giving clarity to the Direct Sales Direct Purchase (DSDP) program.
The resolution was passed sequel to the adoption of the report of the Ad-hoc Committee on the volume of fuel consumed daily in the country and the need to ascertain the actual daily consumption of Premium Motor Spirit (PMS) in Nigeria,’ chaired by Hon. Abdulkadir Sa’ad Abdullahi.
The House also harped on the need to conduct forensic audits of the “consortiums of DSDP operators with the view of unraveling the discrepancies in the importation and supply of premium motor spirit (PMS) commencing from 2015 to date.”
In the bid to address the challenges bedeviling the industry, the House underscored the need to “expedite the full implementation of the Petroleum Industry Act, 2021 which was contemplated to provide and address the challenges and the uncertainties within the oil and gas industry including but not limited to the supply, storage and distribution of premium motor spirit (PMS) in Nigeria.”
To this end, the House urged Federal Government to direct Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) to use of information technology (IT) to monitor, trucks conveying premium motor spirit (PMS) within locations and compel through similar technology a daily data report on the dispense of the product at all Retail Outlets/Fueling Stations, by making it a condition precedent for their continued operation.
The House also stressed the need to charge the agencies of Government, such as the Federal Ministry of Petroleum Resources, the Office of the Accountant General of the Federation (OAGF), Nigerian Port Authority (NPA), Nigeria Maritime and Safety Agency (NIMASA), National Bureau of Statistics (NBS), with the responsibilities of maintaining an independently generated data relating to their core mandate/jurisdiction.
The Committee in the report gave vivid account on how officials of regulatory agencies use Trucks to transport 41,000 litres contrary to the regulated quantity of 33,000 liters, and indulged in other economic sabotage activities within the industry.
The reports were drawn from various submissions tendered by relevant regulatory agencies including Nigerian National Petroleum Corporation Limited (NNPCL), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Navy (NN) and Nigeria Customs Service (NCS) as well as some of the operators who were invited by the Ad-hoc Committee relating to the crude oil lifted under the Direct Sales Direct Purchase (DSDP) program operated by the NNPCL within the period of Year 2016-2021.
In its findings relating to supply of Premium Motor Spirit, the Ad-hoc Committee observed that total of “974,550,000 (BBL) of crude was designated as the Domestic quota for the year 2016-2021 available for the DSDP program, from the record of NUPRC.
“The total sum of crude lifted under the DSDP program within 2016-2021 from the record of NNPCL was 738,759,194 (BBL) while the record from the NUPRC indicates a sum total of 733,260,525 (BBL), with a difference of 5,498,669 (BBL) when compared with the NNPCL record.
“The record from the NMDPRA indicates a sum total of 732,319,016 (BBL), with a difference of 6,440,178 (BBL) when compared with the NNPCL record.
The record from the NN indicates a sum total of 989,562,195 (BBL), with 250,803,001 (BBL) in excess, when compared with the NNPCL record, and
the record from the NCS indicates a sum total of 498,647,923.318 (BBL), with a difference of 240,111,270.682 (BBL) when compared with the NNPCL record.
On its finding relating to storage of Premium Motor Spirits, the House notee that: “sequel to the submission submitted by the NMDPRA, the following are the findings relating to the storage of premium motor spirit (PMS): there are 242 Depots approved for operations in Nigeria, herewith attached as Appendix VII,
“There are 143 Depots that received PMS within the year 2017-2022, herewith attached as Appendix VIII.
“Upon careful scrutiny of Appendix VII and VIII, the table below contains findings extracted from the NMDPRA submission.
“The six Depots contained in the Table 7.2 above, are listed as having received the corresponding PMS as follow: 55,717,867; 258,766,528; 148,766,201; 152,578,186; 432,071,679; and 996,461,978 liters within the year 2017-2022 respectively, whereas they are not on the list of Depots approved for operation in Nigeria.
“The record of the volume of product (PMS) that are on thru-put arrangements cannot be ascertained due to the muddle-up reconciliation report between the NNPC/PPMC and the marketers;.
“Some of the Depot owners are gradually closing down their investment, due to the harsh and unhealthy economic conditions under which, they are constrained to operate, including but not limited to: Delay in the supply of the petroleum product (PMS) by the NNPC/PPMC after payment.
“The delay, consequently resulted into huge accumulated interest on the loan obtained from banks by depot owners;
Indiscriminate offer of credit sales by NNPC/PPMC to selected Depot owners, thereby creating unfair platform for competition.
“Indiscriminate access to foreign exchange by selected marketers, while others are compelled to patronize the parallel market to obtain their Forex in spite of the huge significant difference, thereby creating unhealthy rivalry in the industry.”
On its findings relating to distribution of Premium Motor Spirit, the House noted that: “Sequel to the summary of submission as reflected in item 6.3 of the report, the following are the findings relating to the distribution of petroleum products: the over 5,000 km network of pipeline connecting the federation, which is deemed to be the cheapest and the safest means of transporting or distributing petroleum products has been abandoned due to theft, vandalism and economic sabotage.
“Trucks are the only means of transporting or distributing petroleum products within the federation. A truck distributing PMS conveys an average of 41,000 litres contrary to the regulated quantity of 33,000 liters.
“Given that the sum total of 66,703,905.72 liters was estimated as the daily average supply of PMS in year 2022 in accordance with the record of the NMDPRA, it will require an average of 1,519,4 trucks moving between locations on a daily basis, and the Nigeria Custom in its presentation to the Committee, confirmed several interceptions of trucks and persons with jerry cans trying to smuggle PMS across the Nigerian borders and was unable to ascertain the quantity, neither were they able to safe keep the product due to the inflammability of petroleum product.
In its findings relating to dispense of Premium Motor Spirit at Retail Outlets/Fueling Stations, the Ad-hoc Committee observed that the “sum total of 22,679 Retail outlets/filling station are currently approved by the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) for operation in the federation.
“The NMDPRA, have no record indicating that a certain volume of PMS were discharged to a particular Retail Outlet/Fueling Station or dispensed, the record referred to in paragraph (b) is not a condition precedent to the renewal of licenses for the operation of the retail outlets/fueling stations.
In the summary of its findings, the Ad-hoc Committee stated that: “Arising from the plethora of findings, highlighted above and the fact that, the Nigeria Midstream Downstream Petroleum Regulatory Authority (NMDPRA) exercises regulatory function, over the Midstream and Downstream sector of the oil and gas industry as encapsulated in the Petroleum Industry Act, 2021.
“The summary of the Committee’s findings are as follow: upon thorough scrutiny of the records of various stakeholders, it’s the considered opinion of the Committee that the total volume of PMS supplied in the year 2022 is put at 24,346,925,589 liters or less, which is in tandem with the record of the NMDPRA,
“The daily average volume of PMS supplied in the year 2022 is put at 66,703,905.72 liters or less, notwithstanding, the determination of the Committee to achieve its mandate, there are simply no data to conclusively arrive at the daily consumption of PMS, in view of the fact, that records or information on the daily dispense at the various retail outlets/fueling stations are not readily available,” the report stated.