Illegal refineries supply 90% of diesel used in Nigeria, Tantita alleges

Tantita Security Services, a private security outfit for oil infrastructure, has alleged that over 90 percent of diesel used in Nigeria currently are supplied to illegal refineries operating in communities based in the oil rich Niger Delta region.

Captain Warredi Enisuo, Executive Director, Operations and Technical, Tantita Security Services, who disclosed this in Abuja, said the supply from the communities was the reason why there has been no scarcity of diesel in the country since the price was deregulated reports the Vanguard.

Enisuo who spoke at a panel session at the just concluded Nigerian Oil Gas Energy Week in Abuja, further alleged that both government agencies and oil companies were patronising the illegal refiners as they move to cut cost of operation.

He said: “I guess one of the major things, in terms of my experience working in this sector, that is so highly informed is the communities. I want everybody to go and check how much was diesel before August 2013, compared to the price of diesel in 2011. Why is there no scarcity of diesel (right now)? There is scarcity of PMS.

“The story is simple. Most of the diesel you buy is brewed (refined) by the communities. Don’t let any fuel station deceive you, 90 percent of the diesel in fuel stations are produced by the communities. It will also interest you to know that even the oil companies, they patronise the local diesel refineries.

“Don’t let anyone deceive you. But they do it illegally and behind the doors. So, as we go with the local content, the board has a lot to do with people with this skill and character. I’m not too sure how much your act has done to establish infrastructure, but to be honest with you, we might need to focus more on the communities.

“The reason why the price of diesel is high today is because of the work of the private security companies like my company, because we have been able to somehow cut down on a lot of the business, a lot of the illegal refining going on. That is why you see the cost of diesel going up”.

He urged the government to “let the communities take on the responsibility of ownership. Sense of belonging. This is why we are making progress. If anybody can’t pass the test, they’re in trouble. If you give them that sense of responsibility, I think you will not forget what happened in Niger Delta. But if you put them somewhere where you feel you can outsmart them, maybe it’s done.

To curb oil theft which is estimated to cost the industry about $1.5 billion annually, he said operators and the government must engender the feeling of ownership in the communities by providing the needed infrastructure and empowerment for the people.

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Meanwhile, for the third time this year, queues have resurfaced at petrol stations in the Federal Capital Territory, FCT, and its environs as most outlets ran out of stock.

Checks by Vanguard on Sunday showed that while few retail stations operated by major marketers and NNPC Retails had petrol, most stations across the city and surrounding areas were shut down.

Speaking to Vanguard on the latest supply hiccup, the Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, IPMAN, Chief Chinedu Ukadike said there has been shortage in supply in the past few weeks.

Ukadike explained that it might not be unconnected with the impending delivery of premium motor spirit, pms, from the Dangote Refinery.

He noted that marketers were threading softly in order not to incur losses if the petrol price crashes as a result of supply from the refinery.

He said: “Supply has become epileptic again and we have not received adequate supply in recent times, remember we still depend on the importation of products. Once there is any shortage in supply or logistic problem or procrastination, then the impact is almost immediate.

“I also believe that since Dangote announced its petrol supply intention, those supplying NNPC are sceptical of bringing in products because they don’t want to incur the losses which they suffered when Dangote entered the market and slashed the price of AGO (Automated Gas Oil popularly known as diesel).

“These are market indices and someone has to be careful not to plunge itself into unnecessary deficit. For us independent marketers, most of the products come from NNPC Retails but the company has not supplied us with any product. They allocate products to tank farm owners.

“The tank farm owners will decide to sell marketers at a price determined which is way higher than NNPC Retails. This has made it impossible for independent marketers to sell below N670 per litre and compete with our contemporaries in a deregulated market.

“The essence of a deregulated economy is competition and pricing. The queues are more at filling stations managed by the oil majors and NNPC Retails filling stations where they can petrol at cheaper prices”, he stated.

He therefore called on the Federal Government to check the imbalances in supply and prices, to allow for a free supply of petrol across the country.