Home Community Insights Who Takes Responsibility for the Importation of the Contaminated Petroleum Products Causing Fuel Scarcity in Nigeria?

Who Takes Responsibility for the Importation of the Contaminated Petroleum Products Causing Fuel Scarcity in Nigeria?

Who Takes Responsibility for the Importation of the Contaminated Petroleum Products Causing Fuel Scarcity in Nigeria?

Nigeria, a country politically endowed with dramatic events that come now and then, has a fresh episode in the month of February. A sudden surge in fuel queues in petrol stations around the country forced a confession off the mouth of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), as consumers demanded answers.

“The Nigerian Midstream and Downstream Petroleum Regulatory Authority wishes to inform the general public that limited quantity of Premium Motor Spirit (PMS), commonly known as petrol, with methanol quantities above Nigeria’s specification was discovered in the supply chain.

“To ensure vehicular and equipment safety, the limited quantity of the impacted product has been isolated and withdrawn from the market, including the loaded trucks in transit,” the NMDPRA said in a statement.

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While the bombshell statement provided an explanation to the ‘why is there surge in fuel queues?’ question, it also sparked another question that everyone is still eagerly waiting for its answer: who imported the adulterated PMS?

Nigerian president, Muhammadu Buhari has said those responsible for the importation of the off-spec products will be held accountable.

In its attempt to answer the above question, the Nigerian National Petroleum Company (NNPC) Limited, has in a statement issued on Thursday, pointed accusing fingers at five oil marketers: MRS, Emadeb, Brittania-U, Oando and Duke Oil, its subsidiary. The NNPC Group Managing Director, Mele Aba Kyari said that all defaulting suppliers have been put on notice for remedial actions, and that NMDPRA and the NNPC are going to take necessary actions in line with subsisting regulations.

The NNPC’s statement would have exonerated it from blame if not for the mention of Duke Oil and the subsequent response of the companies it has accused. Apart from Duke Oil, four other companies accused of being culpable by Kyari have each issued a statement denying involvement in the importation of the substandard fuel.

MRS was the first to issue a public notice to clear its name. In a newspaper advert on Wednesday last week, the company had said that it’s the sole responsibility of the NNPC to import fuel, making the claims linking it to the importation of adulterated fuel unrealistic.

“Due to the current subsidy regime, NNPC is the sole supplier of all PMS in Nigeria. Consequently, the NNPC through their trading arm, Duke Oil, supplied a cargo of PMS purchased from international trader Litasco and delivered it with Motor Tanker (MT) Nord Gainer. This vessel discharged in Apapa between the 24th and 30th of January, 2022,” the company said.

Other marketers who issued their statements after Kyari had made his claims, also denied having hands in importing the contaminated PMS – leaving only Duke Oil with the blame.

“Our imported products from our mother vessel, MT Torm Hilde, met all NNPC/NMDPRA product specifications, and we’re duly cleared by DPR (now NMDPRA) in line with Appendix 1 of the NNPC-DSDP Agreement.

“All the PMS from our mother vessel, MT Torm Hilde were discharged with all relevant certificate of quality after laboratory analysis as it was adjudged lead-free, ethanol-free, water-free, suspended matter-free and had a sulfur content of 0.0174 as against 0.05, which is within the acceptable content allowable by Nigerian Midstream and Downstream Authority…” Brittania-U said in a statement, adding that its consortium products had been discharged at retail outlets earlier in January.

NNPC and Duke Oil

At the mention of the name Duke Oil by both Kyari and MRS, Nigerians have been asking: “who is Duke Oil”? The answer to this question dates back to some decades ago. In 1989, the NNPC incorporated Duke Oil as a subsidiary but it was never registered as a Nigerian company. It was registered as an offshore company. According to findings made by investigative journalist David Hundeyin, Duke Oil has about 14 Nigerians headed by Kyari on its board. But that’s about its identity as the company is not quite known to Nigerians. So, when Kyari mentioned Duke Oil as the company responsible for importing the off-spec products, he’s indirectly saying that the NNPC, which by virtue of deregulation and FX management, has become the sole importer of refined crude oil products in Nigeria, was responsible for importing the adulterated products.

As Nigeria’s forex crisis deepened, the Central Bank of Nigeria (CBN) was looking to boost its foreign reserve by saving as much dollar as it could. The apex bank said the government spent N2.13 trillion from 2016 to 2019 subsidizing forex for oil marketers. To boost dollar liquidity in country and stop the naira from free-falling, the CBN needs to stop subsidizing forex for petroleum importers. Besides this, the federal government was pushing for the deregulation of the downstream sector. So came the decision to make the NNPC the sole importer of petroleum products in Nigeria.

However, the NNPC applies the Direct Sale-Direct Purchase (DSDP) arrangement, a swap method which allows a certain quantity of crude oil to be exchanged for its equivalent in refined petroleum products. This means that, even though marketers may be directly involved in bringing in refined petroleum products, the NNPC is still solely responsible for fuel importation while the NMDPRA ensures that the specifications and other requirements are met. Unfortunately, the NNPC said the procedural inspection does not include a test for methanol percentage.

“It is important to note that the usual quality inspection protocol employed in both the load port in Belgium & our discharge ports in Nigeria do not include the test for percent methanol content & therefore the additive was not detected by our quality inspectors,” the petroleum industry regulator said.

This statement is supposed to exonerate the NMDPRA from any wrongdoing if not that it has prompted another question: whose job is it to ensure that the specification of methanol for Nigerian-bound petroleum products is met?

As the drama unfolds, Nigerians are seeing more holes in every explanation given by the responsible agencies. Kyari is yet to issue a statement after the companies he accused earlier denied any wrongdoing, stoking the belief that he has been telling half-truth to shield Duke Oil from the responsibility. It is believed to be the usual ploy that the Nigerian government employs to avoid any responsibility when they make grave errors – and as usual, the Nigerian public will suffer the consequences.

Already, a large number of Nigerian consumers have been impacted by the contaminated petroleum products. Ardova Plc (formerly Forte Oil) an indigenous oil and gas marketing company said that it has had over 130 reported cases of car problems related to the adulterated fuel.

Over time the number is expected to rocket across the country, and the victims who will never get justice will bear the responsibility.

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