This Day (Lagos)

24 May 2012

Nigeria: Pipeline Vandalism Draining the Economy - House

The House of Representatives has raised the alarm over the spate of vandalism of petroleum products pipeline, and expressed fears that the issue has grave consequences on the entire economy of the country.

Also, the house has expressed concern about the poor state of the nation's refineries and argued that Nigeria can only achieve energy security if petroleum products were refined in the country.

Chairman, House of Representatives Committee on Petroleum (Downstream), Mr. Dakuku Peterside, made these observations at a joint session with the management of Department of Petroleum Resources (DPR) in Lagos.

The committee members were in Lagos for oversight of agencies, ministries and departments under their supervision.

Peterside noted that persistent pipeline vandalism was impacting on not just downstream operation but the upstream and mid stream operations of the Nigerian oil and gas sector.

He said: "The other thing is the persistent pipeline vandalism. It is having a very serious effect on not just downstream operation but the upstream and mid stream operations. We think that all agencies in the sector must work together to combat what I can call terrorism of the industry. Pipeline vandalism does a lot of harm, not just only to our people but the entire economy of the country and it deserves very serious attention, and we think the DPR should champion that course".

The committee noted that most environmental challenges confronting the country today were associated with pipeline vandalism and products handling and expressed dissatisfaction over the current state of the Atlas Cove jetty, Nigeria's major reception facility . The Jetty located in Takwa Bay, Lagos, has not been restored to full standard despite the repair work carried out on it after the 2006 fire incident.

The lawmakers further observed that most filling stations in Lagos were located in areas that were strictly residential, noting that apart from the environmental consequences associated with this, the action is also against the physical planning law of Lagos State.

"Another thing we noticed is the location of tank farms, you need to take a second look at the tank farm location and the accompanying environmental challenges. Some of the environmental challenges are associated with the issue of pipeline vandalism and the other times product handling. We were at the Atlas Cove this morning, we are yet to take a position on what we observed or what we saw in Atlas Cove. But again, am not quite impressed about what the government is doing to ensure that that national asset gets the deserved attention.

He continued: "It is unfortunate that because most of our pipelines are not functional, we use tankers to convey products. Many of the tankers are not in very good condition and they litter products all over the place, they further endanger the environment and constitute serious health hazards. We think that your regulation must extend to that area too".

He said government must ensure that the traditional refineries were working at optimal capacity to ensure availability of adequate products for domestic consumption.

" I don't think our refineries are in their very best states and for as long as we cannot refine our products in- country, we cannot talk about energy security. For strategic national consideration, we need to step efforts to refine our products in- country to ensure that the existing refineries are working at optimal capacity, that they produce products that meet the best quality available in the industry", he said.

Responding, the DPR Director, Mr. Osten Olorunsola, noted that most of the outlet stations were built without DPR's approval, adding that the agency had in the past ordered the demolition of such facilities. He said products adulteration, particular diesel, vandalism of pipelines, product round tripping have remained major issues the industry has continued to battle with.

He added that despite the inadequate manpower and equipment and funding issues, the DPR ensured adequate monitoring of crude terminals and engaged both staff, police and naval personnel on surveillance duties at areas where there are reports that people adulterate products.

He said: "There has been quite a lot of adulteration of diesel very recently, and I mentioned one, this Waziri jetty, where we have caught people mixing and mixing, and you shut it down, you inform police, you bring in navy, but drive their around 12 mid night, they are still doing it, even guarded by their people. So is very difficult but are working on it as much as possible."

On price discrepancies, Olorunsola said the agency had shut down more than 100 filling stations across the country due to sharp practices by oil marketers.

"On price control, indeed people have seen all sorts of pricing. This year alone, we have shut down quite a lot stations where we saw people putting prices above the pump price, because ones you get there, you will see it, they will put N140, they put N150, they say is N97, they put it at N105. So when we see these, definitely, we clamp down on them immediately. But I just also want to warn, even when you see N97, please watch very well because you may actually be paying more, because they can then under-deliver for you. They may be selling 0.6 of a litre for a litre, so at the end, you are actually paying a lot more so but if you see any please, just call us", he added.

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