The controversy rages on over the importation of toxic petrol. In what has suddenly turned into blame game, a revelation of past atrocities committed by the supplier, Litasco, exposes the level of due diligence that the sole importer of petrol conducts on its suppliers and vendors. As authorities and stakeholders are trying to get to the root of this crisis, it has been a blame trading episode across board. But what really are the issues? MUYIWA LUCAS asks.
ONE week after, the country has continued to groan from the effects of the “Off Spec” premium motor spirit (PMS) or petrol that found its way into the market. However, the controversy has continued to trail the entire saga, with accusations and counter accusations enveloping the air.
The more the Nigerian National Petroleum Company (NNPC) Limited tries to exonerate itself from the scandal, the more it keeps sinking deeper. For instance, it took an advertorial in national newspapers by MRS, a major oil marketer, before the NNPC could offer any tangible explanation, and in the process, exposing other culprits involved.
For instance, the “Off Spec” fuel was shipped into the country from Antwerp, Belgium, by Litasco, a Geneva, Switzerland-based oil firm. A quick check on Litasco’s website paints an impressive image of this Geneva-based firm with over 450 workforce.
Litasco, a firm founded in 2000 in Switzerland, is the exclusive international marketing and trading company of Lukoil Oil Company, a Russian firm. Litasco describes itself as one of the world’s major traders of crude oil and refined petroleum products.
However, beyond these glorifying eulogies of this Swiss commodities trader, a deeper check unearths the “dirty” side of the firm. The company may not be new to sending substandard petroleum products to West Africa, if a report of the Dutch entitled: “Human Environment and Transport Inspectorate” (ILT) is anything to go by. This is because a 2016 report indicted Litasco as one of the European companies that “deliberately and systematically” use toxic blend stocks in mixing fuels.
ILT, according to a report dated July 10, 2018, presented a report to parliament about the composition and hazardousness of fuels exported to West Africa from Amsterdam and Rotterdam. The investigation highlighted the decisive role played by commodities trading firms that maximise profits by taking advantage of lax West African fuel standards. In contrast to Holland, neither the Swiss firms named in the report – Vitol, Gunvor and Litasco – nor the Swiss authorities recognise their responsibility for this scandal that harms the health of millions of people.
Stakeholders said if this report is anything to go by, then it raised further questions on the extent of due diligence done by business owners or even the NNPC in their choice of partners for engagements.
The report, entitled: Dirty Diesel: Dutch Environment Inspectors Confirm Dodgy Business of Swiss Commodities Traders, was published on July 10, 2018.
In September 2016, Public Eye’s Dirty Diesel investigation uncovered the business model of sending low-quality and harmful fuels to Africa. The Dutch government was forced to promise the legislature a report in which the environment inspectors confirmed the role played by Swiss commodities trading firms: Vitol, Gunvor, Litasco as well as other companies, deliberately and systematically use toxic “blend stocks” in the mixing of fuels.
Starting in 2017, ILT researched the loading of 44 tankers destined for West Africa. It found diesel with 300 times more sulfur and twice as many cancer-causing hydrocarbons as are allowed in Europe. Gasoline contained elements high in sulfur as well as cancer-causing substances like manganese, in concentrations up to 30 times over the European limit. The report concluded that the concerned companies either ignored or were unaware of the European regulation for chemical substances (REACH) and the Dutch law. The environment inspector also investigated fuel oil for sea-going vessels and found products from two commodities trading firms that are categorised as illegal waste.
These results show that West African countries like Nigeria, where the implementation of stricter gasoline standards has been blocked for months, must urgently enact the standards, to protect their people from such toxic cocktails. The United Nations Environment Director Erik Solheim, in his response to the report, called out the corporations profiting from this political indecisiveness: “Substandard products should not be sold even if they meet national standards,” he said.
With this investigation, the Netherlands has taken responsibility as a location for the production and export of hazardous fuels. A further investigation is in progress to determine if “Dirty Diesel” companies are violating the OECD guidelines for multinational corporations.
Meanwhile, in Switzerland, where the concerned corporations have their headquarters, there has so far been no political response to the scandal, not to mention an investigation. This inaction by the authorities on a flagrant violation of the right to health of people in Africa is another example why the Swiss Responsible Business Initiative is necessary.
The spirited efforts of the NNPC to absolve itself of complacency in the importation saga also seems not to be holding waters given that some firms fingered by the company in the deal have come out with proof to absolve themselves of any involvement in the importation of the 50, 000 metric tons or 100 million litres of petrol.
NNPC, for some years, has being the sole importer of PMS. This, the company, does by awarding contracts to its vendors for the shipment of the commodity. The vendors in turn, depending on their partnership with several oil merchants, subcontracts them for shipment of the commodity into the country.But for those with a discerning and critical mind, the question is: at what point was there a slip in the supply chain for this product to get into the market?
This is because a look at the importation process of fuel shows that for every country, there are specifications for their PMS requirements. Usually, before a fuel laden vessel leaves its port of embarkation, tests are carried out on the contents to be sure it meets the correct specification. Further tests are carried out on the high sea on the content and upon the arrival of the consignment in Atlas Cove jetty- which is off the coast of Lagos, the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) moves in to the vessel to test the conformity of the product with the Nigerian standard before it is released into the market. The highest methanol level for Nigeria is just about two per cent. The controversial fuel has a 20 per cent methanol level. Once the product meets the required standard, it is then sent to the depots for onward discharge to marketers through the various means of transportation available, including through the pipelines.
But the question on stakeholders’ mind is: At what point could the product have been contaminated? For some, what happened might not have been contamination of the product in the real sense of it. This is because the vendor contracted to import the fuel already knows the standard requirement of the country. Therefore, bringing in something contrary from means it is an “off Spec”.
Yet, others believe that there could have been a compromise in the supply chain. Reason: Inspectors from the NMDPRA are expected to check the quality of the fuel upon landing at Atlas Cove before it is released into the various markets.
Insiders in the oil sector posit the following as specifications for standard petrol for the market:
The erstwhile DPR (now NMDPRA) and SON specifications state that petrol must be clear and bright; whereas the appearance of the controversial petrol was clearly hazy;
SON/NMDPRA specifications states clearly that petrol range must be between 0.7200and 0.7800g/ml; whereas the imported product has a density of 0.7865g/ml;
SON/NMDPRA specification for petrol’s Full Boiling point (FBP) is 210 degC; whereas that of the controversial fuel 211 degC;
The imported petrol’s solvent washed Gum content is 6.5mg/100ml; whereas SON specifies parameters of 4.0mg/100ml;
The controversial petrol oxidation stability is 329 minutes, compared to the SON/NMDPRA specification of minimum 360 minutes levels.
Another question is: Why did the NNPC appoint few petroleum products marketing companies (some of them portfolio companies) to import petrol leaving out other more competent marketing firms?
Also, why did the NNPC cancel the PMS import intervention scheme that involved the NNPC, CBN, prequalified petroleum marketers and independent auditors, which a former NNPC GMD put in place? This process was adjudged to have been very transparent.
Going by the sample of the fuel as seen in a viral video, it is evident that the fuel could not have met the parameters for the market.
A reliable source in the Standards Organisation of Nigeria (SON) said since the organisation has been chased out of the ports, all sorts of substandard products enter into the country. And until an investigation is done, there will remain more questions than answers.
Providing a graphic chronicle of the unfortunate incident, the NNPC CEO, Mallam Mele Kyari, said on January 20, 2022, that the company 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 PMS cargoes imported by the following Direct-Sale-Direct-Purchase (DSDP) suppliers as listed in the table below.
He noted that cargoes quality certificates issued at loadport (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 PMS import to Nigeria, the said cargoes were certified by inspectors appointed by the NMDRA.
“It is important to note that the usual quality inspection protocol employed in the load port in Belgium and our discharge ports in Nigeria do not include the test for per cent methanol content and, therefore, the additive was not detected by our quality inspectors,’’ he stated. However, to prevent the distribution of the petrol, the NNPC CEO said the company promptly ordered the quarantine of un-evacuated volumes and the holding back of the affected products in transit (truck & marine).
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