C O N F I D E N T I A L SECTION 01 OF 02 LAGOS 000767
E.O. 12958: DECL: 04/07/2014
TAGS: EPET EINV EFIN PGOV NI
SUBJECT: SCANDAL BREWING OVER NIGERIAN FUEL IMPORTS
Classified By: J. GREGOIRE FOR REASONS 1.5 (B), (D), AND (E).
¶1. (C) SUMMARY. A scandal is brewing in Nigeria over prices paid by the government for imported fuel. International fuel traders have been falsifying the dates of bills of lading to reflect particularly high market prices, overcharging the Nigerian National Petroleum Corporation (NNPC) by $300 million or more. END SUMMARY.
¶2. (C N/F) On April 2, Chris Finlayson, Chairman and Managing Director of Shell Petroleum Development Corporation of Nigeria (SPDC), told Consul General and Econoff that a scandal is brewing within the NNPC over payments made to international fuel marketers. Finlayson said some marketers have been changing the dates when fuel shipments bound for Nigeria were loaded in order to take advantage of particularly high market prices. He said the total overpayment by NNPC may be as high as $330 million. Finlayson noted that Shell is not one of the marketers in question, but is becoming a leading fuel supplier for NNPC.
¶3. (C N/F) On April 6, Femi Otedola, President and CEO of Zenon Petroleum and Gas, the largest supplier of diesel fuel in Nigeria, essentially corroborated Finlayson's report. Otedola said over $300 million has been overpaid by NNPC for fuel imports, and that many leading international traders are involved. According to Otedola, NNPC contracts to pay its suppliers the market price on the day a ship is loaded with fuel. He said NNPC recently discovered, however, that bills of lading were altered to reflect loading on days of high market prices. Discrepancies were found when comparing dates on the bills of lading with dates of landing in...