Bad fuel sailed from same port

Seven firms await “remedial action”

Sopuruchi Onwuka

The Nigerian National Petroleum Company (NNPC) Limited has stated that seven companies in four consortia for its Direct Supply and Direct Purchase (DSDP) contracts were unable to diversify their imports, leading to syndication on wrong specification of petrol.

Chief Executive Officer and Group Managing Director of NNPC Limited, Mallam Mele Kyari, stated on Thursday that four consortia comprising seven companies sailed four vessels off Antwerp, Belgium with petroleum cargoes that are laced with methanol, a component not captured in local specification tests.

Mallam Kyari however restated the capacity of NNPC Limited to rise to the challenge of filling supply gaps created by withdrawal of the off-spec petrol from the market.

The Oracle Today reports that the domestic fuel market has been thrown into supply distortions in the past one week following recall of the four cargoes of petrol discharged into the country by the consortia. And speculations that the incidental scarcity in the market was antecedent to highly canvassed commercial deregulation of the market and associated price jumps have led to panic buying and sharp market practices impacting on the already fragile economy.

The NNPC Limited is currently the sole supplier to the domestic market and it meets this obligation by enlisting the services of its DSDP contractors in swapping crude allocation to its moribund refineries for equal value of refined products from foreign refineries.

Mallam Kyari stated that all the seven companies involved in the controversial import are mainly indigenous trading companies already cleared for DSDP contracts.    

He said the NNPC Limited had on January 20 received a report from its quality inspector on the presence of emulsion particles in PMS cargoes shipped to Nigeria from Antwerp-Belgium.

He explained that NNPC investigation revealed the presence of methanol in four petrol cargoes imported by the seven DSDP suppliers, including Duke Oil, its own trading business unit.

He also noted that cargoes quality certificates issued at loadport  in 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 import to Nigeria the cargoes were further certified by inspection agent appointed by the NMDRA. He however made it clear that methanol checks were not part of quality control inspection process for imported petrol in Nigeria.

“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 .

In order to prevent the distribution of the petrol, Mallam Kyari said NNPC promptly ordered the quarantine of all unevacuated volumes and the holding back of all the affected products in transit, both truck and marine.

The volume withdrawal from the market, The Oracle Today had previously reported, had led to acute supply gaps and scarcity in the retail market, forcing many retail outlets in Lagos and Abuja to shut out customers due to low stock levels.

Our survey yesterday showed that the fuel retail market remained very tight with few marketing companies attending to desperate customers in some locations. The situation has led to sharp market practices, including imposed levies on buyers, breaking of price caps and hoarding of products.

Mallam Kyari said the defaulting suppliers in the controversial imports have been put on notice for remedial actions and that NNPC was working with the Nigerian Midstream and Downstream Regulatory Authority (NMDRA) to take necessary actions in line with subsisting regulations.

The company reassured Nigerians of its capacity to restore sanity in the supply and distribution of quality Premium Motor Spirit (PMS) also known as petrol across the country within a short period. 

Mallam Kyari held 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.