Barely one month after Gunvor International B.V, Amsterdam, supplied 33,000 metric tonnes (MT) of petrol with high ethanol to a Nigerian company, Oando Plc, the Dutch company has allegedly supplied two more cargoes of the product for distribution in Nigeria.
The product had damaged the engines of many vehicles in the country early this month.
The vessels, FT Freja Selinda and Lovell Sky, both bearing 33,000 MT of gasoline (petrol), were said to contain 22 per cent and 20 per cent of ethanol respectively and were consequently prevented from discharging in the country.
It was not clear which marketing companies the cargoes were meant for.
Industry sources said the high ethanol content was discovered in the course of analysis by operatives of Department of Petroleum Resources (DPR) as the certificate of quality of the cargoes allegedly did not reflect the fact that ethanol was included in the product.
According to the sources, the DPR had since the Oando experience stepped up vigilance to ensure that no petrol containing ethanol was delivered in Nigeria.
�One of the importers of these cargoes is UK-based Masefield. They said, they had no knowledge of the ethanol content until it was rejected in Nigeria. They contracted to buy from Gunvor Nigeria Grade Gasoline 90 RON. Gunvor on the other hand has supplied them petrol with 20 per cent ethanol which is a biofuel and the existence of this level of ethanol was not reflected in the certificate of quality presented by Gunvor or in any other documentation received from them.
�The Nigerian market would have been infused with 99,000 MT of petrol with incredible levels of ethanol content had it not been for the intervention of the DPR. This would have led to another round of engine malfunction similar to what the nation witnessed at the beginning of the month,� the source said.
A DPR source confirmed the interception of the two vessels last night but would not disclose the identity of the supplier.
�Since the Oando incident, I am always in touch with our operatives there. On Thursday, they informed me that two vessels were discovered to contain high ethanol and that they did not allow them to discharge,� the DPR official said.
But one of the importers, who spoke from the United Kingdom, also confirmed the transaction but offered to give details today.
The presence of ethanol in petrol, while not destructive in itself, requires special handling when the limits exceed 10 per cent. Vehicle engines have to be modified to utilise such higher level fuels.
Currently, the facilities in Nigeria can only comfortably handle five per cent and storage and distribution facilities are being inspected to ascertain when the country will be able to utilise petrol with 10 per cent ethanol (E10).
Industry experts agree that Ethanol is primarily a supplement to gasoline that is used to boost the octane level and that it meets the environmentally friendly requirements for oxygenated fuels.
Twenty per cent Ethanol content (E20), however, is well in excess of the normally acceptable limits of five per cent in Europe, 10 per cent in North America most of South America and Asia. Brazil and parts of Canada, Sweden, Thailand, Columbia, Japan, Australia and the Philippines utilise E20 which is petrol with ethanol content of 20 per cent.
These countries constitute less than five per cent of the countries in the world and have infrastructure, storage and dispensing facilities as well as vehicle engines specifically designed to contain this material.
Nigeria is not one of these nine countries and has only started developing its own ethanol programme in the last four years.
Gunvor had last month supplied 33,000 metric tonnes of petrol to Oando.
The product was later discovered to contain 20 per cent ethanol which is higher than Nigeria�s blend ratio of five per cent.
Consequently, the company was severely sanctioned by the DPR.
The fuel was delivered to Nigeria Gunvor on February 14, 2008.
Explaining the transaction, Oando had claimed that on arrival, the product was subjected to DPR routine tests in line with industry specifications and was found to meet set and prescribed standards.
The company alleged that the fact that the product contained a high content of ethanol was not reflected in the original certificate of quality issued at the load port nor was it revealed to it by the supplier prior to the 28th of February 2008. It therefore plans a legal action against the supplier.
But Gunvor claimed that composite samples retained from the cargo showed it as being of a quality consistent with the demands of the importer and declared that any legal action against it with regard to the shipment would be met with a vigorous response.
Mar312008