Letters of credit (L/Cs) may have been improperly used in schemes to import substandard fuel, including petroleum products, that originated in Russia but was shipped via Malta and then on to Nigeria.

One firm allegedly involved in such a scheme is Matrix Energy, which according to several reports has been involved in importing fuel substandard from Russia via Malta.

L/C difficulties

Like many other companies involved in the importation of petroleum products into Nigeria, Matrix Energy, typically uses L/Cs as a standard method of payment. A recent advertisement for the post of senior finance executive at Matrix Energy Group lists the 'preparation of letter of credit drafts for issuance by banks' as one of the job requirements.

But opening an L/C for the purchase of Russian oil could potentially violate US, EU and other international sanctions, depending on the specific circumstances. This means that while it may be technically possible for a Nigerian firm to open an L/C to purchase Russian oil, it is fraught with legal and financial risks.

Matrix Energy

Recent reports have highlighted that Matrix Energy allegedly imported petroleum products, including substandard or 'dirty' fuel, from Russia through intermediaries in Malta. This has raised concerns and controversies, particularly regarding the quality of the fuel imported and the potential impact on vehicles and machinery in Nigeria.

The situation has led to significant scrutiny and legal challenges, as the company has been accused of importing off-specification products that do not meet the required standards.

Matrix Energy has denied these allegations, stating that their products meet the specifications set by Nigerian regulators.

Other options

Alternative ways for Nigerian importers to buy Russian fuel could include the use alternative currencies such as the Chinese yuan or the Indian rupee. Another solution could be to use non-sanctioned banks to facilitate the transaction, but this approach comes with significant risks and limitations.

Nigerian firms might use local banks that do not have direct ties to the US or EU financial systems. However, these banks may still be cautious due to the potential repercussions of secondary sanctions.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.