…fuel scarcity will run for 10 to 15 days.
…NNPC order to start arriving in 8 days time
Olusola Bello
Greedy marketers whose intentions most often are to make high profits from any business involving them and Nigeria are responsible for the current fuel scarcity the country is experiencing.
Their action has also caused the country a huge sum of financial loss, estimated to be in the region of N14.5billion going by the current landing cost of N290 per litre.
The vessel is said to have a capacity of about 50 000 metric tons. When you convert 50,000metric tons to litres, it gives you 50 million litres, and when this is multiplied by N290 landing cost it gives you N14.5 billion
NNPC is the sole importer of fuel but through its Direct supply and Direct Purchase agreement it engages some contactors to import fuel on its behalf. The process of selection of the contractors is often faulted by industry watchers who alleged that the process lack transparency.
From all indications the scarcity will continue for a few days, precisely about 15 days before the supply situation would normalize in the country, according to highly placed sources in the industry.
Investigation by Business Standards revealed that the desire to make more profit margin pushed them to compromised the quality of the fuel they brought in by mixing it with higher percentage of Methanol. There was also a high volume of water in the fuel.
Nigeria normally does not use Methanol as fuel; however a very low percentage of the product like five percent of it is understood is usually allowed to blend the fuel, perhaps just to shore up the profit margin of the importers. The five percent does not have any impact on the quantity of the product brought in. But when it is higher than that, such as 15 or 20 percent, then, there would always be trouble.
It should however be noted that Methanol and water are not friendly, as the mixture of the two results into what is called sludge which can damage engine of any vehicle.
In the present situation, the importer was alleged to have brought into the country fuel with about 20 percent Methanol content and water which was discharged into MRS facility.
This is said to be just one of the many vessels with various degrees of Methanol content that have queued up to discharge their contents into Nigerian facilities, the sources stated.
But with this development, the remaining vessels hovering around on the Nigerian seas have to look elsewhere to offload their contents. If it is true that the other vessels are laden with methanol, it means the financial loss would be far higher than N14.5 billion. There is the unformed information that there about 7-8 of such vessels waiting to discharge their contents.
For now, there is no immediate replacement for the one being evacuated from marketers facilities.
The NNPC according investigation has promised that it can only bring another set of supplies in about eight days time. Meaning that marketers would have to wait till about 10 days before they can take delivery of a new product. It may take another five days for supply to normalized across the country.
Aside from Methanol, the fuel was also diluted with high volume of water to such an extent that it became difficult for marketers that received the product to drain the water. As it is the NNPC may have to backload the product from the storage facilities of some of the companies that have already taken the product.
This is why the queues at the filling stations would take sometime to go.
Another reason why supply may not normalize on time is that, even when regular specs are supplied now, the system would not be immediately saturated because people who before now were buying half tanks would now be tempted to fill their tanks because of uncertainty, some people would also buy more to store, so as the fuel is being pumped into the system you discover that more and more is being required until when the markets are saturated.
The companies that have suffered from this incident are Total, OVH, Ardova and Pinnacle. Nipco plc it was learnt also received some of the product which is yet to be evacuated from it facilities.
Meanwhile the Nigerian Midstream and Downstream Petroleum Regulatory Authority (The Authority) in unsigned press statement by any particular person on Tuesday night stated that it 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.”
“Methanol is a regular additive in Petrol and usually blended in an acceptable quantity.”
“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”
“Our technical team in conjunction with NNPC Ltd and other industry stakeholders,will continue to monitor and ensure quality petroleum products are adequately supplied and distributed nationwide.”
It stated that the source supplier has been identified and further commercial and appropriate actions shall be taken by the Authority and NNPC Ltd.
“NNPC Ltd and all Oil Marketing Companies have been directed to sustain sufficient distribution of Petrol in all retail outlets nationwide.”
It however concluded that NNPC has intensified efforts at increasing the supply of Petrol into the market in order to bridge any unforeseen supply gap.
