NNPC may spend N201bn to clean 170.25m litres of dirty fuel

The Nigerian National Petroleum Company Limited may need an estimated N201bn worth of clean Premium Motor Spirit (petrol) to bring 170.25 million litres of adulterated product imported the country up to standard, an analysis of industry data has shown. The Nigerian Midstream and Downstream Petroleum Regulatory Authority had said on Tuesday that for every 200 litres of the adulterated product, 800 litres of petrol with good quality would be required for the blending that would be done. “All the off-spec material (product) will re-blended to very good quality, and it will be certified and recertified before it goes into the market. The component that was in excess was methanol; what we agreed was that for every 200 litres of the affected volume, we need about 800 litres to blend,” the Chief Executive Officer, NMDPRA, Mr Farouk Ahmed, had said during a visit to some depots in Lagos on Wednesday after a meeting with industry stakeholders. The regulator had on Tuesday said a limited quantity of PMS with methanol quantities above Nigeria’s specification was discovered in the supply chain. On Wednesday, the NNPC Group Managing Director, Mele Kyari, said the national oil firm received on January 20, 2022 a report from its quality inspector on the presence of emulsion particles in PMS cargoes shipped to Nigeria from Antwerp-Belgium. He said NNPC investigation revealed the presence of methanol in four PMS cargoes imported by its DSDP (Direct Sale Direct Purchase) suppliers namely MRS, Emadeb/Hyde/AY Maikifi/Brittania-U Consortium, Oando and Duke Oil. Under the DSDP scheme, selected overseas refiners, trading companies and indigenous companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products to the NNPC. MRS had in a statement issued on Tuesday said the Duke Oil, a trading arm of NNPC, supplied a cargo of PMS through a vessel that delivered a total of 36,958 metric tonnes (49.56 million litres) in Apapa between January 24 and 30. Emadeb/Hyde/AY Maikifi/Brittania-U Consortium said on Thursday that one of its members, Brittania-U was the sole supplier of a cargo, containing 90,000MT (120.69 million litres) of PMS delivered on January 2 to 4. 681m litres of good fuel require for two cargoes, quantity of two cargoes remains unknown Going by the NMDPRA’s parameter for the re-blending of the adulterated petrol, the two cargoes, containing a total of 170.25 million adulterated petrol, would require 681 million litres of clean product worth N201bn (based on a landing cost of N295 per litre). The N201bn is a conservative estimate, as there are other costs that would be associated with the re-blending. However, the quantity of the other two cargoes remained unknown as of the time of filing this report. Meanwhile, the President, Major General Muhammadu Buhari (retd.), on Thursday in Abuja directed service providers to fully disclose relevant information concerning the consumption of their products and compensate dissatisfied consumers. The Senior Special Assistant to the President on Media and Publicity, Garba Shehu, disclosed this in a statement on Thursday titled, ‘Providers of substandard fuel must be held accountable, directs President Buhari.’ Sylva had on Wednesday hinted that the government would look into possible compensation for Nigerians whose automobiles had been damaged by the contaminated fuel. Shehu’s statement, however, quoted the President as saying that he ‘has ordered that producers and providers of consumable products be held accountable for substandard services and or products sold by them. “The President has also given directives to the relevant government agencies to take every step in line with the laws of the country to ensure the respect and protection of consumers against market abuses and social injustices.” Reacting to the petroleum product shortages, Buhari said the protection of consumer interests was his regime’s priority, adding that he was ready to take all necessary measures to protect consumers from hazardous products, loss or injuries from the consumption of substandard goods. According to the presidential spokesman, Buhari has directed that in line with the law, “service providers must make full disclosure of relevant information with respect to the consumption of their products and that dissatisfied consumers are entitled to a proper redress of their complaints.” Reps demand MRS, Oando, others’ suspension, NNPC, Customs, Navy’s probe Meanwhile, the House of Representatives on Thursday demanded a probe of key stakeholders allegedly involved in the importation of adulterated Premium Motor Spirit into Nigeria. The Nigerian National Petroleum Company Limited and MRS Oil Nigeria Plc had traded blame on the issue. Several members of the House, who spoke on the development, called for sanctions against Federal Government agencies and officials who failed to carry out due diligence before passing the product for onward distribution to marketers. The House consequently resolved to investigate the matter, insisting that those in the import and distribution chain whose action or inaction led to the spread of the commodity must be held accountable. The Majority Whip, Mohammed Monguno, had moved a motion of urgent public importance, titled ‘Need to Investigate the Release and Sale of Adulterated Premium Motor Spirit (PMS) in Petrol Stations Across Nigeria.’ Adopting the motion, the House mandated the Committee on Petroleum Resources (Downstream) to “investigate the release of adulterated PMS across the country, with a view to ensuring that culprits are brought to book as well as make recommendations towards curbing a reoccurrence of such incident.” The House also asked the committee to “ascertain whether the Nigerian specification concerning importation, distribution and dispensing of the alleged toxic petrol in Nigeria, from January till date, complies with international standards.” Also, the lawmakers further asked the committee to “investigate the roles played by the NNPC Limited, Standard Organisation of Nigeria, Nigeria Customs Service, Nigerian Navy, any other government regulatory agencies, limited liabilities companies and individuals in the unfortunate episode.” Furthermore, the House asked NNPC Limited to suspend the four companies involved in the importation of the adulterated PMS Moving the motion, Monguno said, “Recently, the country witnessed a sudden scarcity of PMS, with the attendant long queues at petrol stations, especially in the Federal Capital Territory and Lagos State. According to reports, the scarcity was as a result of adulterated petrol in circulation, upon the discovery of which the Federal Government ordered the stoppage of further distribution of the product. “The poor quality product was noticed about a week ago when many car engines of motorists were reportedly damaged and consumers allegedly started arresting and suing retail outlet owners for selling them products which damaged their vehicles.”