Following the circulation of adulterated gasoline in Nigeria, which damaged vehicle engines last week, the federal government turned away two tankers carrying loaded gasoline in Antwerp, Belgium, and bound for Lagos, a learned THISDAY.
It comes as the Organization of the Petroleum Exporting Countries (OPEC) and its allies have continued to produce crude oil below their production targets, with the group’s output falling by a record 700,000 barrels per day ( bpd) below its collective quotas in January.
The off-spec fuel, it has been learned, has been discarded amid the raging controversy over bad fuel circulating in the country, which has led to the disruption of the country’s supply chain, leading to long queues at gas stations across the country.
According to figures released by the sole importer, the Nigerian National Petroleum Company (NNPC), the current problematic gasoline supply, which has stalled movement in Abuja, Lagos and some other parts of the country, has been compounded by the shortage of inventory.
Like yesterday, the majority of petrol stations in Abuja were closed even as motorists spent hours in the sun struggling to buy from the few that were open.
Imported shipments are said to be high in methanol content, while traders have been advised not to sell to consumers, after more than 100 million liters were reportedly in circulation.
But citing Refinitiv Eikon vessel tracking and other sources, Reuters reported that the two tankers, STI SYMPHONY and VELOS DIAMANTIS, had been turned away by the Federal Government amid other oil cargoes being loaded at Antwerp to contain too much of methanol.
According to a ship broker’s meeting list and data from Refinitiv Eikon, Litasco chartered the STI SYMPHONY for January 15 to deliver 90,000 tonnes of gasoline to West Africa.
The STI SYMPHONY loaded petrol in Antwerp around January 22 before sailing to Lagos but has now been turned away, according to Refinitiv ship tracking Eikon.
However, the tanker turned around off the coast of Guinea in February and is now heading for the Amsterdam-Rotterdam-Antwerp oil hub, Reuters reported.
According to the report, the NNPC did not respond to a request for comment. Litasco previously said it does not comment on business activities and did not immediately respond to a question about STI Symphony.
The VELOS DIAMANTIS, carrying 60,000 tons and allegedly chartered by Mercuria, turned back on February 4, after giving Lagos as its destination, Refinitiv Eikon ship tracking showed. A Mercuria source, however, said the company no longer owned the tanker’s cargo.
The NNPC had while working to absolve itself of any complicity in importing and distributing millions of liters of the wrong product in the country, naming Belgium as the country of origin of the adulterated fuel.
Amid vehicle damage in some states across the country, the federal government had pledged to investigate the matter with a view to bringing the culprits to justice.
NNPC Group Managing Director, Mallam Mele Kyari, however, said that according to his investigation, the four oil shipments were imported by MRS, Emadeb/Hyde/AY Maikifi/Brittania-U Consortium and Oando.
All of the companies named, with the exception of Duke Oil, the trading arm of NNPC, have since denied any complicity.
Ironically, Kyari had maintained that cargo quality certificates issued at the port of loading in Belgium, by AmSpec Belgium, indicated that the product complied with the Nigerian specification.
Furthermore, he said quality inspectors from NNPC including GMO, SGS, GeoChem and G&G conducted tests before unloading which showed that the cargo also met the country’s standards.
He said all defaulting suppliers have been given notice to take remedial action, stressing that NNPC will work with other stakeholders to take further necessary actions in accordance with applicable regulations.
He did not explain what “other necessary measures” would be taken, even after saying there was no national standard for methanol in imported fuel in Nigeria.
The decision to reject the shipments also came days after President Muhammadu Buhari expressed his anger over the tainted gasoline being imported and circulating in the country.
THISDAY had exclusively reported that the President therefore ordered that the Managing Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Farouk Ahmed be questioned immediately.
NNPC also announced in January that it had received four tankers carrying unusable oil loaded in Belgium by Litasco, the trading arm of Russia’s Lukoil, and sold to local traders.
The fuel was found to contain too much methanol and was withdrawn from circulation, causing shortages across the country.
Following the incident, the NNPC banned methanol content in future gasoline deliveries. Previously, traders said Nigeria did not specify the methanol content. Methanol is sometimes added to gasoline in small amounts because it is a cheaper, cleaner fuel that also improves engine performance.
Although methanol, in small amounts, is a common gasoline additive, the industry regulator said the supplier of the off-spec gasoline was known but did not name the company.
The NNPC handles almost all imports through crude-for-fuel contracts, known as direct sale, direct purchase (DSDP), with consortia of local and foreign oil companies.
Each THISDAY consortium has learned, receives a few amounts of crude oil in exchange for gasoline.
Embattled NMDPRA chief executive Farouk Ahmed said during the week that the NNPC had received a delivery of 300 million liters to fill the supply gap created in the country by the withdrawal of off-spec gasoline.
The NMDPRA boss had further said that the country currently has gasoline that can last for 20 days, which is 10 days less than the usual 30-day supply.
OPEC production drops 700,000 bpd
Meanwhile, OPEC and its allies continued to produce crude oil below their oil production targets, with the group’s output dropping a record 700,000 barrels per day (bpd) below its quotas. groups in January.
An S&P Global Platts survey indicated that the 13 OPEC countries increased production by 150,000 bpd from December, pumping 28.19 million bpd of crude, while the nine non-OPEC partners, led by the Russia, only managed to add a measly 10,000 bpd, producing 13.99 million bpd.
The cartel’s underperformance has continued even as there appears to be no end to the rise in oil prices driven by tighter supply and rising demand for the commodity, primarily due to growing tensions between Ukraine and Russia.
Oil traders continued to be rattled by reports that a Russian invasion of Ukraine could take place within days and push oil prices above $95 in heavy trading volumes.
Traders fear disruptions in the flow of oil and natural gas from Russia to Europe in the event of war, either directly due to the explosion of pipelines or the cessation of flows, or indirectly when trade in the energy is caught up in the penalties.
Russia supplies Europe with a third of its natural gas needs and exports around 2 million bpd of crude oil and refined products to European countries.
According to OPEC’s Monthly Oil Market Report (MOMR) for January, released this week, Nigeria struggled to pump 1.399 million bpd of total allocation, citing primary (direct) sources.
This contrasts with December 2021 when it pumped 1.197 million barrels per day and November when it was only able to produce 1.275 million bpd.
The biggest increases in crude oil production came from Nigeria, Saudi Arabia, the United Arab Emirates (UAE) and Kuwait, while output fell in OPEC’s second-largest producer Iraq. , as well as in Venezuela and Libya.
But in total, S&P said 14 of the 18 members with quotas underperformed their targets, pushing OPEC+ compliance to 120.8%, the highest level since the group instituted record production cuts. in April 2020 to pull the oil market out of its pandemic meltdown.
Despite strong gains from key members of the Gulf Group and Russia, disruptions in several OPEC+ countries, including Venezuela, Kazakhstan, Libya and Iraq, limited the bloc’s growth in January, it said. he declared.