. NNPC reassures Nigerians on fuel supply
. Reps seeks suspension of importers
Four companies have been identified as the importers of the high methanol premium motor spirit (PMS) also called petrol, currently being withdrawn from circulation.
Methanol, depending on its quantity in the fuel blend, can either protect or damage a vehicle engine.
The importers of the off-specification (off-spec) fuel include: Duke Oil, the wholesale distribution of crude petroleum and petroleum products arm of the Nigerian National Petroleum Company (NNPC) Limited, Oando, MRS, Emadeb/Hyde/AY Maikifi/Brittania-U Consortium.
The NNPC Group Managing Director/Chief Executive Officer, Mele Kyari, disclosed this in an address yesterday, thus ending speculation that the Company was the sole importer of the bad fuel.
The disclosure comes amid several days of upheaval in the supply chain, characterised by long queues due to scarcity of petrol in major cities in Nigeria, especially Lagos and Abuja, and calls to name and shame as well as punish the offenders.
Equally to share in the blame are the litany of regulators who were expected to ensure that only the right blend of products suitable for the Nigerian environment were allowed in but were caught napping.
Who imported what?
The NNPC statement also revealed that the four importers took delivery of the toxic fuel from the same port, LITASCO Terminal, Antwerp-Belgium, but from different vessels as shown below:
Importer Vessel Name Load Port
- MRS — MT Bow Pioneer — LITASCO Terminal, Antwerp-Belgium
- Emadeb/Hyde/AY Maikifi/Brittania-U Consortium —- MT Tom Hilde —- LITASCO Terminal, Antwerp-Belgium
- Oando — MT Elka Apollon — LITASCO Terminal, Antwerp-Belgium
- Duke Oil —- MT Nord Gainer — LITASCO Terminal, Antwerp-Belgium
About Antwerp-Belgium and LITASCO SA
Two of these refineries – Antwerp N.V. Refinery (Vitol), 35,000 barrels of oil per day (bbl/d) and Independent Belgian Refinery, Antwerp (Gunvor), 107,500 bbl/d, were converted to distribution terminal, in 2021 and 2020, respectively.
The remaining two are run by French oil major, TotalEnergies, and US counterpart, ExxonMobil, with a capacity of 360,000 and 333,000bbl/d, respectively.
Ironically, Belgium does not have a single oil reserve, meaning it does not produce any crude but imports all of its oil to meet local consumption estimated at 697,000bpd in November 2021, according to data giant, Knoema.
LITASCO SA was founded in 2000, in Switzerland, as the exclusive international marketing and trading company of LUKOIL, a member of the Moscow, Russia-based, LUKOIL Group, set up in 1991.
LITASCO said its “mission is to maximize the results and value of LUKOIL’s crude oil production and refined petroleum product exports by trading, shipping, storing and hedging.”
Counter-claims among importers
Among the four importers, Oando has fallen foul of importing off-spec product for the second time. The first incidence occurred in 2008, when it imported PMS with higher ethanol content than required for the Nigerian market.
Exactly on February 14th, 2008, Oando said it took delivery of 33,000 metric tons of PMS from Gunvor International BV Amsterdam, one of the refineries listed above. Then, the oil firm absolved itself of blame, and instead claimed it was “a victim of this unfortunate incident,” as it had trusted the competence of the supplier.
Rather than share love as demanded of the month in commemoration of St. Valentine, the company, instead, shared pain through the importation of the bad fuel, with many motorists claiming damages to their engines.
On its part, MRS in a statement insisted that “NNPC is the sole supplier of all PMS in Nigeria.
“Consequently, NNPC through its trading arm, Duke Oil, supplied a cargo of PMS purchased from international trader Litasco and delivered it with Motor Tanker (MT) Nord Gainer.”
Emadeb Energy Services in its own statement dissociated other members of the consortium and blamed Brittania-U for all the wrong-doing.
A statement released by the lead partner, reads in part: “We hereby state that the said importation of the contaminated PMS was executed by a member of the consortium, to wit: Brittania-U.
“Brittania-U Nigeria Limited (Brittania-U) was the sole supplier of the 90,000MT of PMS delivered via MT Torm Hilde with Laycan January 2 to 4.”
It therefore added that “the blanket claims made against the consortium by the NNPC are misleading and contradict the actual events that happened; as they do not fully reflect and/or represent what transpired.”
It is important to note that the usual quality inspection protocol employed in both the load port in Belgium and our discharge ports in Nigeria do not include the test for percent methanol content and therefore the additive was not detected by our quality inspectors.
Discovering product contamination
Providing a graphic chronicle of the unfortunate incident, Kyari said that on January 20th, 2022, NNPC received a report from its quality inspector on the presence of emulsion particles in PMS cargoes shipped to Nigeria from Antwerp-Belgium.
Upon further investigation, he said the presence of methanol in four PMS cargoes imported by the following Direct-Sale-Direct-Purchase (DSDP) suppliers as listed above.
He noted that the cargo quality certificates issued at load port (Antwerp-Belgium) by AmSpec Belgium indicated that the gasoline complied with Nigerian Specification.
“The NNPC quality inspectors including GMO, SGS, GeoChem and G&G conducted tests before discharge also showed that the gasoline met Nigerian specification,” he said.
Kyari noted that as a standard practice for all PMS imports into Nigeria, the said cargoes were equally certified by an inspection agent appointed by the NMDRA.
“It is important to note that the usual quality inspection protocol employed in both the load port in Belgium and our discharge ports in Nigeria do not include the test for percent methanol content and therefore the additive was not detected by our quality inspectors,” he stated.
However, to prevent the distribution of the petrol, the NNPC CEO said the company promptly ordered the quarantine of all un-evacuated volumes and the holding back of all the affected products in transit (both truck & marine).
There are almost 11 charts before PMS gets to the filling stations. First, at the importation level, there is a company that ascertains the product that is being brought into the country… For this to happen, it means the system is completely compromised.
A gale of investigations
After days of speculation regarding the identities of the importers of the contaminated fuel, the Federal Government, through the Minister of State for Petroleum, Timipre Sylva, on Wednesday said it was investigating the matter, promising that culprits must be held accountable.
Yesterday’s admission by NNPC of culpability of one of its subsidiaries and the other importers spiralled into more calls for more investigations, with the House of Representatives asking for the suspension of the four companies.
The House also directed its Committee on Petroleum Resources (Downstream) to probe all importations of PMS and other petroleum products from January till date.
A member of the House, Magaji Aliu, was particularly miffed about the level of negligence among the deluge of regulators, which he linked to system collapse.
He said: “There are almost 11 charts before PMS gets to the filling stations. First, at the importation level, there is a company that ascertains the product that is being brought into the country. When it comes to Nigeria, we also test.
“All the marketing companies have independent laboratories to ascertain the quality of the product. For this to happen, it means the system is completely compromised.”
Another lawmaker, Tajudeen Yusuf, called for restitution to cab drivers, whose vehicles have been affected by the bad fuel, adding that both the importers and the regulatory agencies should be thoroughly investigated for carelessness.
He said: “With the layers of inspection, laboratory checks, it was not discovered until it got to vehicles; the implication is that they choose to look the other way. Unfortunately, that is the reality of our country. Everybody chooses to look the other way.
“The Federal Government has a responsibility because an agency of government failed in its responsibility and innocent people are suffering.”
Also, in view of claims of damages to engines, the Federal Competition and Consumer Protection (FCCP), yesterday, announced that it has also launched an investigation into the importation of the high methanol fuel.
The Commission said in the process of its initial investigative assessment understands that consumers who purchased fuel that constitutes part of this consignment have experienced technical difficulties and or damage to their vehicles or other relevant equipment/machinery.
In a statement signed by its Executive Vice Chairman/Chief Executive, Babatunde Irukera, FCCP said: “In furtherance of its investigation; and pursuant to relevant laws, the Commission is currently engaging multiple regulators and entities relevant and involved in the PMS distribution value chain.
The purposes of ongoing engagements include:
- Addressing hardship or difficulties consumers may experience with respect to withdrawal of the implicated products from the market
- Securing assurance and promoting consumer confidence that supply constraints are addressed and will not persist
- Ensuring that the regulator’s recall effort under applicable laws and regulations including Petroleum Industry Act, 2021 and Federal Competition and Consumer Protection Act, 2018 (FCCPA) sufficiently excludes continuing distribution of the implicated product
- Encourage and promote additional and robust mechanisms to prevent reoccurrence
- Develop a meaningful and transparent mechanism to address demonstrated injury to affected consumers.
In furtherance of its investigation; and pursuant to relevant laws, the Commission is currently engaging multiple regulators and entities relevant and involved in the PMS distribution value chain.
NNPC reassures the public
Despite the furore being generated over the toxic fuel, NNPC has reassured Nigerians of its capacity to restore sanity in the supply and distribution of quality PMS across the country within a short period.
Kyari made the pledge at the end of a meeting with some oil marketers to resolve the issues generated by the recent supply and discharge of methanol blended petrol in some Nigerian depots.
He emphasized that defaulting suppliers have been put on notice for remedial actions, while NNPC is working with the Nigerian Midstream and Downstream Regulatory Authority (NMDRA), to take necessary actions in line with subsisting regulations.
