Clean-up of Imported Dirty Fuel May Cost Nigeria N201 Billion

Nigerian Parliamentarians Direct NNPC To Suspend Companies Involved in Selling Adulterated Fuel (News Central TV)

Based on an analysis of industry data, the Nigerian National Petroleum Company Limited may need 201 billion Naira ($484 million at $=N413.60) worth of clean Premium Motor Spirit (petrol) to bring 170.25 million litres of adulterated product into compliance with national standards.

For every 200 litres of the adulterated product, 800 litres of petrol of good quality would be required for the conversion. This was announced on Tuesday by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

“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, Farouk Ahmed, had said during a visit to some depots in Lagos on Wednesday after a meeting with industry stakeholders.

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Clean-up of Imported Dirty Fuel May Cost Nigeria N201 Billion (News Central TV)
Group managing director of NNPC Mele Kyari

The regulator had said on Tuesday that methanol quantities in the PMS supply chain exceeded Nigeria’s specification.

On Wednesday, Mele Kyari, group managing director of NNPC, said the company received a report from its quality inspector on January 20, 2022, regarding emulsion particles in PMS cargoes shipped to Nigeria from Belgium.

According to the NNPC investigation, methanol was present in PMS cargoes imported from four different suppliers via the Direct Sale Direct Purchase scheme, namely MRS, Emadeb/Hyde/AY Maikifi/Brittania-U Consortium, Oando, and Duke Oil.

The DSDP scheme provides crude supplies to selected overseas refiners, trading companies and local companies in exchange for the delivery of petrol and other refined products to the NNPC.

On Tuesday, MRS announced that Duke Oil, a trading unit of NNPC, had provided a total of 36,958 metric tonnes of PMS through a vessel which delivered a total of 49.56 million litres of it to Apapa between January 24 and 30.

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According to the Emadeb/Hyde/AY Maikifi/Brittania-U Consortium, one of its members, Brittania-U, provided 90,000MT (120.6 million litres) of PMS to the consortium on January 2 to 4.

Two cargoes require 681 million litres of good fuel, but the amount of the two cargoes is unknown

By NMDPRA guidelines, re-blending the adulterated petrol would require 681 million litres of clean product worth N201 billion (based on a landing cost of N295 per litre).

The N201 billion estimate is conservative, since there will be other costs associated with the re-blending.

At the time of filing this report, it was not known how much the other two cargoes weighed.

The House of Representatives on Thursday demanded a probe into the importation of adulterated Premium Motor Spirit into Nigeria.

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NNPC and MRS Oil Nigeria Plc traded accusations regarding the issue.

The members of the House who spoke on the issue called for sanctions against those in the Federal Government who failed to conduct due diligence before allowing the product to be sold.


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