Key Points
- The EFCC says it recovered 2.3 million litres of Automotive Gas Oil (AGO) valued at about N4.485 billion.
- The diesel was recovered from Ibafon Oil and Gas in Lagos following a petition by Prudent Energy and Services.
- Prudent Energy alleged that petroleum products stored at the depot had been unlawfully withdrawn or converted.
- A reconciliation exercise reportedly found 206,761 litres against an expected balance of 2.574 million litres.
- The resulting deficit was 2.367 million litres.
- EFCC says the recovered products have been handed back to Prudent Energy.
- The case highlights weaknesses that can arise in petroleum-product storage, inventory management and custody arrangements.
Main Story
The Economic and Financial Crimes Commission (EFCC) has recovered 2.3 million litres of Automotive Gas Oil (AGO), valued at N4.485 billion, from an oil storage facility in Lagos following allegations that petroleum products belonging to a customer were unlawfully withdrawn and converted.
The recovery was carried out on Monday, August 17, 2026, by operatives of the Lagos Zonal Directorate 1 of the EFCC at Ibafon Oil and Gas, following a petition submitted by Prudent Energy and Services Limited.
The commission disclosed the development on Tuesday, saying the investigation centred on allegations of stealing and criminal conversion involving petroleum products entrusted to Ibafon for storage.
At the centre of the case is an apparent mismatch between the volume of diesel Prudent Energy expected to have in storage and the quantity physically found at the depot.
According to the EFCC, periodic withdrawals from the stock had reduced the outstanding inventory to 2,574,031 litres. But when investigators and representatives conducted a subsequent physical measurement and reconciliation exercise, only 206,761 litres were found in the storage tanks.
That left a shortfall of 2,367,270 litres.
How the alleged diversion happened
The EFCC said its investigation established that Ibafon Oil and Gas operates both as a buyer and seller of AGO while also providing storage facilities for petroleum products belonging to customers.
The arrangement means that large quantities of products belonging to different parties can be held within the same depot, making accurate inventory management and documentation critical.
The commission alleged that Mamemo Ibru, owner of Ibafon Oil and Gas, used his position to truck out petroleum products beyond the quantity belonging to his company and allegedly converted products belonging to Prudent Energy for personal or business use.
The allegation has not been established by a court, and the investigation remains ongoing.
Following the EFCC’s intervention, the commission said the recovered petroleum products were handed over to Prudent Energy.
The numbers tell the story
The scale of the alleged discrepancy is central to the case.
| Inventory position | Volume |
| Expected outstanding stock | 2,574,031 litres |
| Physically found | 206,761 litres |
| Alleged deficit | 2,367,270 litres |
| EFCC recovery | 2.3 million litres |
| Estimated value | N4.485 billion |
The figures illustrate why disputes involving petroleum storage can quickly become financially significant.
At the reported value, the recovered diesel represents billions of naira worth of inventory that was the subject of the alleged conversion.
Why depot controls matter
The case also exposes a less visible but critical part of Nigeria’s downstream petroleum industry: the management of products after they arrive at storage facilities and before they reach distributors and consumers.
Oil marketers routinely rely on third-party depots to store large volumes of petrol, diesel and other petroleum products.
Under such arrangements, the owner of a product may not physically control the facility where the commodity is stored. This creates a need for accurate measurement, tank reconciliation, documentation, access controls and independent inventory monitoring.
Any significant breakdown in those systems can result in disputes over whether products were legitimately withdrawn, lost through operational processes or unlawfully diverted.
For businesses dealing in millions of litres of petroleum products, even a relatively small discrepancy can translate into substantial financial losses.
What’s Being Said
The EFCC said Prudent Energy alleged that petroleum products entrusted to Ibafon for storage were progressively withdrawn, resulting in a major difference between its expected inventory and the physical stock available.
The commission stated:
“During a subsequent physical measurement and reconciliation exercise, only 206,761 litres remained in the storage tanks, leaving a deficit of 2,367,270 litres.”
The EFCC further alleged that the depot operator’s activities went beyond legitimate withdrawals and involved the conversion of products belonging to Prudent Energy.
The Bigger Oil Sector Picture
The development comes as Nigeria’s financial crime authorities continue to focus on the oil and gas sector, where large transactions, complex supply chains and significant volumes of physical commodities create opportunities for financial and commercial disputes.
The downstream sector in particular has undergone major changes in recent years following fuel subsidy reforms, deregulation and increased private-sector participation.
With billions of naira worth of petroleum products moving through storage terminals, marketers and distributors, effective product-accounting systems have become increasingly important.
The EFCC’s intervention therefore extends beyond the immediate dispute between Prudent Energy and Ibafon. It raises broader questions about custody, accountability and inventory controls across Nigeria’s petroleum storage network.
Related EFCC intervention
The commission’s action also comes against the backdrop of its involvement in other financial matters within the oil and gas industry.
In a separate development, the EFCC recently facilitated the recovery of $60 million from indigenous oil and gas company Nestoil Limited, with the funds reportedly paid to a consortium of lenders as part of efforts to address outstanding obligations.
The lenders involved include Access Bank, Zenith Bank, Ecobank, Afreximbank, First Bank of Nigeria, FCMB, United Bank for Africa and Union Bank.
The development illustrates the increasing involvement of financial regulators and enforcement agencies in resolving large-scale financial disputes and alleged irregularities within Nigeria’s energy sector.
What’s Next
The investigation into the alleged diversion of Prudent Energy’s diesel is expected to continue as the EFCC works to establish how the missing products were withdrawn, where they went and who else may have been involved.
Investigators are also likely to examine storage records, movement documentation, trucking records, transaction documents and other evidence relating to the petroleum products.
The eventual outcome will determine whether criminal charges are warranted against the individuals or entities involved.
Bottom Line
The EFCC’s recovery of 2.3 million litres of diesel worth N4.485 billion puts the spotlight on the risks surrounding third-party petroleum storage in Nigeria.
While the allegations against Ibafon Oil and Gas remain subject to investigation and due process, the case demonstrates how weak inventory controls or disputed custody arrangements can translate into billions of naira in potential losses.
For Nigeria’s downstream sector, the bigger lesson is clear: as billions of litres of petroleum products move through private storage facilities, accurate measurement, transparent records and tight inventory controls are as important as the fuel itself.
 has recovered 2.3 million litres of Automotive Gas Oil (AGO), valued at N4.485 ...){kind=link}