The Economic and Financial Crimes Commission (EFCC) has recovered 2.3 million litres of Automotive Gas Oil (AGO), commonly known as diesel, valued at N4.485 billion from Ibafon Oil and Gas in Lagos.
The recovery follows an investigation into allegations of stealing and criminal conversion of the fuel product. The operation took place at the company’s depot in Lagos, where the commission secured the massive volume of diesel.
According to reports from the EFCC’s discovery via Nairametrics, the action was part of a broader effort to curb financial crimes and illicit trade within the energy sector.
The valuation of the recovered diesel reflects the current market volatility of AGO in Nigeria, where prices have fluctuated significantly following the removal of fuel subsidies and the liberalisation of the downstream sector.
Criminal conversion, the charge cited by the commission, typically occurs when a party lawfully possesses a product but subsequently treats it as their own or diverts it for an unauthorised purpose, depriving the rightful owner of the asset.
Regulatory Challenges in Nigeria’s Downstream Sector
The recovery highlights the persistent challenges of product diversion and theft within Nigeria’s downstream oil and gas network. Large volumes of fuel are often diverted from official supply chains to the black market to capitalise on price differentials.
This illicit trade creates artificial scarcity, driving up costs for legitimate businesses, manufacturers, and transport operators who rely on diesel for power generation and logistics.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is tasked with monitoring product movement and ensuring compliance with licensing and storage regulations.
However, the involvement of the Economic and Financial Crimes Commission suggests that the scale of the Ibafon Oil and Gas case extends beyond mere regulatory breaches into the realm of high-value financial crime.
Such operations are becoming more frequent as the government seeks to tighten oversight of the energy value chain to prevent leakages and ensure that refined products reach their intended destinations.
Industry analysts note that the lack of transparent digital tracking for fuel movements from depots to retail outlets makes the sector vulnerable to the type of conversion alleged in this case.
The recovery of N4.5 billion worth of product represents one of the larger single-point seizures of diesel in recent months, underscoring the potential scale of unauthorised holdings in private depots.
The EFCC is expected to determine whether the recovered diesel will be auctioned to recover lost funds or returned to the rightful owners if a specific complainant was identified during the investigation.
The directors and management of Ibafon Oil and Gas may face prosecution under the Advance Fee Fraud and Other Fraud Related Offences Act or the stealing provisions of the Criminal Code.
The commission has not yet specified if other depots in the Lagos area are under similar investigation as part of a coordinated sweep of downstream operators.
Further legal proceedings will determine the final disposition of the recovered assets and the culpability of the company’s leadership.
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