You are currently viewing NNPC may spend N201bn to clean 170.25m liters of dirty fuel

NNPC may spend N201bn to clean 170.25m liters of dirty fuel

  • Post comments:0 Comments

On the 14th February 2022, the Nigerian Midstream and Downstream Petroleum Regulatory Authority stated that for every 200 liters of contaminated product, 800 liters of good-quality gasoline would be required for blending. “All contaminated product will be re-blended to a very high standard, and it will be certified and recertified before being released to the market.” Mr. Farouk Ahmed the Chief Executive Officer of the NMDPRA, said during a visit to some depots in Lagos. “What we agreed was that for every 200 liters of the affected volume, we need about 800 liters to blend,” he said.

Mele Kyari, the NNPC Group Managing Director, stated that the national oil company got a report from its quality inspector on the presence of emulsion particles in PMS cargoes sent to Nigeria from Antwerp, Belgium, on January 20, 2022. Methanol was found in four PMS cargoes imported by NNPC’s DSDP (Direct Sale Direct Purchase) suppliers, according to him: MRS, Emadeb/Hyde/AY Maikifi/Brittania-U Consortium, Oando, and Duke Oil.

According to MRS, Duke Oil, a trading arm of NNPC, supplied a cargo of PMS through a vessel that delivered a total of 36,958 metric tonnes (49.56 million liters) in Apapa between January 24 and 30. The Emadeb/Hyde/AY Maikifi/Brittania-U Consortium announced that Brittania-U, one of its members, was the sole supplier of a cargo of 90,000MT (120.69 million liters) of PMS delivered between January 2 and 4. For two cargoes, 681 million liters of excellent gasoline are required; however, the size of the two cargoes is uncertain. According to the NMDPRA’s re-blending parameter, the two cargoes, which contain a total of 170.25 million liters of contaminated petrol, would require 681 million liters of clean fuel for N201 billion (based on a landing cost of N295 per liter). Because there are other expenditures related with the re-blending, the N201bn is a modest estimate. The fact that NNPC has to spend an enormous amount of funds to mop up adulterated products is a worry for the industry and the nation in general, these is because such an operation is likely to take time. Henceforth the current petroleum scarcity being experienced nationwide is very likely to persist for the time being. A blowback in terms of prices of Petroleum Products (AGO MGO PMS) is that marketers with good product will be swamped with buyers and won’t be able to keep up with demand, such leaves open the avenue to exploit the public by initiating a price hike. The current instability once more highlights the need for optimal functioning refineries in the country to prevent such from happening again, but for the time being, the prices of Petroleum Products will continue on the possibility of being on the high side until a solution is sort out.

Source:  PifMedia, BizWatch, TheNGblog.

Leave a Reply