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Monday, 30 May 2016

The 168th Organization Of Petroleum Exporting Countries (OPEC) Conference
ALTHOUGH the partial de­regulation of the downstream sector by the Federal Govern­ment is expected to pave way for investors wishing to enter into the importation of petro­leum products into the country, there have been apprehension among members of the public that this announcement may lead to the circulation another round of toxic fuel in the coun­try due to the inbuilt corrup­tion in the sector.

Nigerians cannot be in a hur­ry to forget the news of the ves­sel christened Ostention laden with toxic fuel. The Italian vessel gained access to Nige­rian territorial waters in 1996, where unsuspecting members of the public innocently bought contaminated fuel as genuine petrol resulting in the massive damage of automobiles, genera­tors and other forms of machin­ery that use fuel as their source of energy.

That year, Nigerians car own­ers, recorded huge losses that were neither compensated for by the Federal Government nor the respective fuel stations where this contaminated prod­uct was bought.

At that time, the only feature that exposed the fuel as being contaminated or substandard was the horrifying odour that came with it which was not syn­onymous with the usual smell of fuel.

But because that was the only one available, Nigerians just as­sumed nothing was wrong, un­til automobile engineers began to record high turnover of dam­aged engines.

The 1996 incursion of toxic fuel christianed ‘Abacha Fuel’ was the most reported due to the far reaching effects it had on consumers. This was fol­lowed by that of 2003 and the Oando toxic fuel saga of 2008. Of all the cases recorded, it was only that of 2003 that happened five days into the announce­ment of deregulation.

Enter 2016 deregulation

The pronouncement by the Federal Government on May 11, 2016, that it has withdrawn from further subsidising pre­mium motor spirit (PMS) was received with mixed reactions. While the masses felt it was a way of inflicting further hard­ship on the common man, im­porters of petroleum products received the news with excit­ment because they have always canvassed for the deregulation of the downstream sector to al­low more private sector players come in and subsequently de­termine the price of products.

Though stakeholders have argued that what the Federal Government has done was not complete deregulation it re­mained a first step towards de­regulation.

Following the announce­ment, the Petroleum Products Pricing Regulatory Agency (PPPRA) released a new pricing template which adjusted the price of petrol from N86.60 to a new bandwidth of N135-N145.

The agency equally an­nounced that with the com­plete removal of subsidy, other private sector operators who may be interested in the impor­tation of petroleum products can now begin to do so.

Prior to May 11, only the Nigerian National Petroleum Corporation (NNPC) and a few members of the Major Oil Marketers Association of Nige­ria (MOMAN) were importing fuel. In fact, at a point, MO­MAN members had to pull out of petroleum products importa­tion because they had no access to foreign exchange coupled with the huge backlog of sub­sidy arrears owed them.

How to avoid buying toxic fuel

Now that the sector has been subtly deregulated and all man­ner of players can now come in to import petroleum products, there is the tendency to have a repeat episode of the 1996, 2003 and 2008 toxic fuel episodes as some unpatriotic businessmen and saboteurs may use the op­portunity to flood the market with substandard petroleum products capable of damaging vehicles and being injurious to health due to the taxity of some regulators.

But the best way to avoid being a victim of toxic fuel is to patronise known and estab­lished names in the petroleum downstream sector because they have a pedigree and adhere strictly to standards set by the Department of Petroleum Re­sources (DPR) and the Interna­tional Standards Organisation (ISO) approved specification for PMS approved by Standards Organisation of Nigeria (SON).

A toxic fuel, according to a former Group Executive Direc­tor, Refining and Petrochemi­cals, Nigerian National Petro­leum Corporation (NNPC), Mr. Anthony Ogbuigwe, has high sulphur content and other harmful chemicals, which re­sult in high incidence of dis­eases with attendant high cost in health and development.

Regrettably, he revealed that Nigeria and some other African countries have been importing toxic fuel, with an average $1.6 trillion spent yearly to treat dis­eases traceable to petroleum products.

But one of the easiest ways to identify a bad fuel is through its foul odour. Most contaminat­ed or substandard fuel have a unique smell different from the usual smell of petrol known to a regular buyer.

Ogbuigwe who is also the President of African Refiners Association said, “unfortunate­ly, many of these poor quality petroleum products are com­ing from outside Africa because the industry is unregulated and people are bringing in prod­ucts that have higher sulphur content and other chemicals, which are affecting our health.

“Many respiratory illnesses and sarcomatosis illnesses are traceable to this poor quality fuel. So, African Refiners Asso­ciation (ARA) is saying, we are going to go to African regional bodies like African Union (AU), Economic Community of West African States (ECOWAS), South African Development Commission (SADEC) and East African Community to plead with them for us to adopt specifications for better quality products.”

DPR, MOMAN react

But the Head, Public Affairs, DPR, Mrs. Dorothy Bassey, in a reaction to Daily Sun’s enquiry said there was no cause for alarm as regards the incursion of toxic fuel into the country.

She explained that with the space open for everyone to get involved in the importation of petroleum products, DPR has equally concluded arrange­ments to tighten the noose on anyone that may want to per­petrate evil by bringing in sub­standard products.

‘‘Our officers have been put on the alert across the coun­try while our laboratories are equally equipped with modern equipment to detect any form of substandard petroleum prod­uct. Once any vessel berths on Nigerian territorial waters, we are already on ground to carry out the necessary tests.”

She said the agency was poised to protect unsuspecting members of the public against falling prey to the antics of un­scrupulous businessmen, add­ing that once a vessel convey­ing petroleum products into the country falls short of the prescribed standards, such ves­sel would be sent back to the country of origin.

‘‘No businessman will want to waste his resources by hav­ing his vessel returned to the country of origin as a result of it not meeting the prescribed standards. Once this happens, the importer loses his resourc­es and would be subsequently handed over to law enforce­ment agents.”

She said the agency was more prepared than ever because it is aware that there would be in­creased activities in the down­stream sector, especially with the coming on board of more importers, hence the decision of DPR to have two dedicated telephone numbers for the use of members of the public to report any sharp practices no­ticed on the part of importers or marketers.

On his part, the Executive Secretary of MOMAN, Mr. Obafemi Olawore, told Daily Sun that the appointment of two inspection agents – SGS and PSI – to carry out pre-des­tination inspection would have made the importation of sub­standard fuel impossible.

He maintained that the two inspection agents are reputable organisations that cannot col­lude with importers to influ­ence the report of results car­ried out on petroleum products anywhere in the world.

‘‘Yes, the door has been thrown open for every inter­ested party to follow but there are guidelines to follow. Even in deregulation, there is a regu­latory framework.

If you look at the telecommu­nications sector, there is NCC and if it has to do with oil and gas, we have the DPR looking at quality and the Petroleum Products Pricing Regulatory Agency (PPPRA) looking at the quantity.

“As I talk to you, I am aware that both agencies are working on fresh guidelines to guide the operations of downstream sec­tor operators, especially as it relates to who does what,’’ he said.

Olawore said with the lib­eralisation of the sector, DPR would be alive to its responsi­bilities because the process is full proof with double checks before the products leave the country of origin and the sec­ond one carried out before the ship enters the country’s ter­ritorial waters and berths at the jetty; samples are picked and tests carried out to ensure product integrity has not been compromised.