Saving the nation from bad fuel havoc

That a leading indigenous Oil marketing company was fingered in importation of adulterated fuel into the country is no longer news to Nigerian citizens, particularly in Lagos and its environs. This is not the first time Nigeria is experiencing importation of low quality otherwise known as off Spec fuel into the country.

Between 1997 and 1998, bad fuel with unpleasant odour was imported into this country and had very negative effect on vehicle engines. Similarly, in early 2000,low quality Household Kerosene (HHK) was imported resulting in kerosene explosion in different parts of the country. Prominent among the states most affected was Edo State. Apart from the loss of several lives and maiming of many, many properties were also lost through fire.

While commenting on the issue in an interview with The Guardian, Minister of State for Energy (Petroleum) Mr.Odein Ajumogobia spoke on the penalty for those who brought in such bad product into the country. Ajumogobia said though government was not impressed by the development, but noted that the issue was nipped at the bud, thereby reducing the possible widespread of the damage.

“Well I’ve been getting reports and it’s been quite disappointing but I must say I am glad that we have found the source”.

Ajumogobia added:” I am not sure that there were lapses in the regulatory processes, I think accidents happen sometimes and we are still investigating the circumstances leading up to the introduction of adulterated fuel and once we find out who is responsible then there would be sanctions against those who are culpable”.

Many, however, felt that the Department for Petroleum Resources, DPR, which is statutorily responsible for supervising and ensuring that quality products are allowed into the country, should be blamed for this unhealthy development.

Apart from the initial investigation conducted by DPR to control the spread of the bad fuel and further damage to vehicles, Oando, the company that was alleged to have brought the bad fuel into the country, has been sanctioned by way of closing its major depot in Apapa.

DPR also closed down some of its stations while the company, through which the product was sourced, was equally blacklisted from importing fuel into the country. DPR also ordered Oando to clean up its stations where the product has been supplied.

Mr.Niyi Olowora, Head Media, Oando Plc said the company’s depot at Apapa was closed down by DPR to enable the company evacuate all the products in its facilities as a way of getting double assurance that the bad fuel has been taken care off.

He also noted that some motorists in Lagos had reported incidents of vehicle malfunctioning after using petrol from some filling stations in some sections of the metropolis.

Some of the affected stations belong to some major marketers, including African Petroleum (AP),ExxonMobil, Oando, Conoil and Texaco.

Speaking on the development on telephone, Director of DPR Mr Tony Chukwueke disclosed that the affected product was indeed ethanol imported by Oando Plc in place of PMS.

Ethanol (ethyl alcohol, grain alcohol), according to the United States (U.S.) Department of Energy’s

National Renewable Energy Laboratory, is a “clear, colourless liquid with a characteristic, agreeable odour” – and taste.

This is the drinkable alcohol, the active ingredient in beer, wine and spirits. This is usually in form of biofuel obtained from sugarcane, corn or wheat. But automobile experts say Nigerian cars are not designed to run on ethanol.

Chukwueke said that Oando claimed it did not know the product was ethanol, adding that this was not acceptable and that a penalty would be imposed accordingly.

He also explained that the DPR could not ascertain the difference because both ethanol and PMS since they both have the same flash-point level of between five per cent and 10 per cent, adding that except specific checks are carried out, it becomes difficult to determine the difference.

The DPR boss also disclosed that the affected product has a flash-point of 20 per cent, an indication that the DPR may have failed to carry out any specific checks on the imported product.

Chukwueke insisted that the importer of the product usually knows the refinery from which the product is coming and the specifications, adding also that even though it is commonplace to blend ethanol with PMS, it should not be more than five per cent.

Speaking on the development, Dr. Levi Ajuonuma, Group General Manager (GGM) in charge of Group Public Affairs Department also disclosed that preliminary investigations revealed that Oando Plc was responsible for importation of the product, adding that the corporation expects the DPR to investigate and determine how and why the product got into the market.

“It is the duty of the department to determine product specification and ensure that off-spec products are not allowed into the market”, he said.

In a separate statement issued by Mobil Oil Nigeria Plc the company distanced itself from the development, stating that it was indeed another marketing company that imported the product into the country.

“We can now confirm that similar customer complaints were indeed received beyond Mobil stations. We confirm also that the product in question was imported into the country by another major marketer; certainly not Mobil Oil Nigeria (MON), a statement signed by its Manager, External Affairs, Mr. Akin Fatunke, stated.

He said the DPR has directed the recall and quarantine of the product by all marketers, adding that MON has complied with this directive and arranged for the affected retail outlets to be supplied with product from other sources.

Chukwueke earlier said that MON appeared worst impacted by the development, because the company was completely out of product, took delivery from Oando in line with their sharing formula, but failed to blend it to specification before supplying their retail outlets.

However, this still raises questions about regulatory supervision over the supply and delivery processes.

Further investigation revealed that other marketers, including Total and Conoil Plc., carried out laboratory tests and when it was discovered that the product was below standard, they declined purchase.

The first alarm over the presence of adulterated fuel came from Consumer Protection Council (CPC) in a statement by its Assistant Director (PR), Mr.

Abiodun Obimuyiwa. CPC noted that the agency’s preliminary investigations had confirmed that one of the major oil marketers has been identified to have the bad fuel in some of its retail outlets.

The council also wrote a letter to the DPR, the Sector Specific Regulator, on the development.

The CPC, in the letter to DPR, urged it to take urgent steps in investigating the source of any bad PMS, with a view to arresting the situation and curtailing its spread to other parts of the country.

Though some managers of the stations of the alleged major marketer confirmed the existence of the bad fuel in Lagos, they claimed it was yet to get to Abuja.

The station managers further claimed that they have been put on alert to properly scrutinise new consignments before off-loading them for sale to consumers.

As part of its investigation, the council has taken samples of PMS (fuel) in circulation for further laboratory analysis.

Oando Plc later issued a press statement on the matter. The statement, signed by the management reads:

“Oando imported a cargo of 33, 000 metric tonnes of gasoline (petrol) from Gunvor International B.V Amsterdam on the 9th of January 2008. The said cargo

arrived in Nigeria on the 14th of February 2008. The product was subjected to Nigeria’s routine tests in line with industry specifications and standards upon arrival and the test results showed that the product was in accordance with the laid down specification.

Sometime thereafter, however, there were complaints from some receivers about the product’s effect on cars further to which we undertook further tests. These tests revealed nothing wrong with the specification but revealed the presence of an unspecified substance.

We made further enquiries from the Gunvor, who informed us that there was a high level of ethanol in the product. We requested load port samples to be re-tested and the retest confirmed this information on the 29th of February 2008.”

The statement continues: “The issue of high ethanol content was willfully concealed from us by the supplier. Not being a material that forms part of the specification of Nigerian grade gasoline, we do not test for ethanol content and there was no indication in the original certificate of quality issued at load port of its presence.”

“Immediately upon receiving this information, we set every available machinery in motion to mop up the product from circulation and stopped further sale of same to consumers”.

“We have, however, used our best endeavours to contain the situation and we are currently working with other marketers and Department of Petroleum Resources to effectively evacuate the quarantined product to ensure that none of the product remains within the system.

“Oando is as much a victim of this unfortunate incident, as many other Nigerians who have been adversely affected by this occurrence. We have,

accordingly, commenced necessary legal action with a view to ensuring that the suppliers of the product assume full responsibility and bear liability for

damages caused to vehicles as a result of use of the product.

“We affirm our commitment to delivering quality products to all our esteemed customers and we can confirm that appropriate mechanisms have been put in place to forestall any future occurrence of this nature”.

Sources disclosed to The Guardian that the major marketers, with the backing of the Nigerian National

Petroleum Corporation (NNPC), had taken remedial steps to forestall any likelihood of shortfall as a result of the recall of the contaminated products.

According to the source, NNPC and the marketers had ordered about 85 million litres of petroleum motor spirits otherwise known as petrol with the first batch of consignment expected this week.

“There wouldn’t be any shortages because all the marketers that had their tanks filled with the bad or unwholesome fuel have arranged with those marketers that have empty tanks to receive good products from the two ships that are coming from marketers, about 45 million litres and another 40 million litres from the NNPC. On arrival, all the products would be

discharged into good tanks,” he said. The negative impact of the ethanol-based fuel has been attributed to the lack of adequate storage facilities for that type of product in the country.

Ethanol fuel, otherwise known as E10, is one of the best refined fuels in the world and it is being used in Brazil and some other countries, but inadequate storage of the product connotes danger to end users as a little drop of water in the product ends up making it acidic, which could damage vehicle engines.

The major petroleum marketing companies started importing petroleum products under a joint agreement to improve supply in the country last month.

The agreement signed by members of the Major Oil Marketers Association of Nigeria (MOMA) stipulated that a minimum of two cargoes of Premium Motor

Spirit (PMS) would be imported every quarter.

DPR said on Friday that it would not hesitate to take appropriate sanctions against petroleum products marketing companies found to be responsible for the distribution of contaminated fuel on sale in some filling stations in Lagos.

Mobil Oil Nigeria (MON) management said following complaints from customers about the toxic fuel, sales were stopped, while a full-scale investigation was ordered, pointing out that preliminary findings indicated that similar customer complaints were

received in other stations.

“We are working with the Directorate of Petroleum Resources (DPR) and other Major Marketers to identify the root cause of the occurrence,” Manager, External Affairs, Akin Fatunke, said in a statement, adding:

“We can confirm that the vast majority of MON stations nationwide, including Lagos are unaffected by this development. We wish to re-assure our customers that MON remains committed to providing products and services of the highest quality standards at all times.”

” We confirm also, that the product in question was imported into the country by another major marketer; certainly not Mobil Oil Nigeria (MON).

The revised directive will introduce an obligation for fuel suppliers to reduce the greenhouse gas emissions that their fuels cause over their life-cycle, that is, when they are refined, transported and used. From 2011, suppliers will have to reduce emissions per unit of energy by 1 per cent a year from 2010 levels. This will result in a 10 per cent cut by 2020.

This obligation will promote the further development of low-carbon fuels and other measures to reduce emissions from the fuel production chain, and will help ensure that the fuel sector contributes to achieving the EU’s greenhouse gas reduction goals. To enable a higher volume of biofuels to be used in petrol, a separate petrol blend will be established with a higher permitted content of oxygen-containing additives (so-called oxygenates), including up to 10per cent ethanol. The different petrol blends will be clearly marked to avoid fuelling vehicles with incompatible fuel. To compensate for an increase in emissions of polluting vapours that will result from greater use of ethanol, the Commission will put forward a proposal for the mandatory introduction of vapour recovery

equipment at filling stations later this year.

These vapours, known as volatile organic compounds, contribute to the formation of ground-level ozone pollution, which can cause premature death in people with breathing difficulties or heart problems.

From 1 January 2009 all diesel fuel marketed will have to have an ultra-low sulphur content (no more than 10 parts per million). This will cut pollutant emissions, primarily of dust particles (‘particulate matter’),the air pollutant most dangerous for human health.

This sulphur reduction will in particular facilitate the introduction of new pollution-control equipment such as particle filters on diesel vehicles. From the same date, the maximum permitted content of another dangerous substance in diesel, poly aromatic hydrocarbons (PAHs), will be reduced by one-third.