Similarly, the committee wondered if CBN could be unaware of the forex scam in the subsidy bazaar. To qualify for forex transaction, an applicant or marketer must be an importer of petroleum products. To qualify for this, the port of loading must be outside Nigerian territorial waters. This ambiguity was cleverly exploited by Nigerian marketers who then instructed their sellers to berth a few nautical miles outside Nigerian territorial waters where ship to ship, STS, transfers between the seller’s mother vessels and the Nigerian marketer’s shuttle vessels were carried out. These STS operations often occurred offshore Cotonou or Lome illegally.



Legally, STS should only be carried out in areas so designated by the concerned country. In the case of Nigeria, the STS locations were not known to any country. “We established that no port duties or other legal levies were paid to any country. It was a massive illegal activity and we were unable to establish the existence of such practice anywhere else in the world,” stated the committee.



This encouraged round-tripping, and it was found that some vessels claimed to be making two impossible trips in three days between the imaginary Offshore Contonu/Lome and Lagos. Foreign importers admitted they were ready to berth in Nigeria but being businessmen, they did the bidding of their Nigerian buyers. Vitol SA and Trafigura, two leading foreign importers, confirmed as much. “No responsible seller will flout these regulations,” stated Vitol SA, which made over 250 voyages of PMS to 34 different marketers in 2011. The same foreign importers, including Vitol and Trafigura discharge all PMS belonging to NNPC/PPMC in Nigerian territorial waters and discharge those of other marketers offshore, yet no regulatory agency raised eyebrows because the sleaze is beneficial to all. The explanation is that NNPC is not affected by CBN forex regulation as it deducted its forex claims directly from source. This way, CBN “created through its forex policy avenue for easy falsification of records of quantity of petroleum products discharged.”