Why Nigeria May Continue To Import Dirty, Low-Grade Fuel
Have you been to the mechanic recently with issues regarding faulty fuel pumps, nozzles or injectors?
Or perhaps you generator has been coughing harder than it used to. It may have been caused by low quality fuel.
In August 2015, reports by Natural Resources Governance Institute emerged that the oil companies that take Nigeria’s crude oil in exchange for refined products always shortchange the country by supplying low grade end products.
The bad fuel was said to contain more Sulphur content than required and is unhealthy for the environment as it worsens pollution.
After the report was released, the Nigerian National Petroleum Corporation, NNPC set a July 2017 deadline to stop importing such.
But reports have now emerged that NNPC may not be able to meet that deadline and would continue to buy low-grade (cheap) fuel.
The move to raise standards for gasoline and other fuels imports from July 1, was backed by the U.N. Environment Programme which has pushed for using cleaner fuel in Nigeria and other parts of Africa.
According to traders who spoke to Reuters, large contracts swapping Nigerian crude for refined products signed in recent days between NNPC and major traders offered premiums of as much as $25 a tonne for cleaner fuels with less Sulphur.
NNPC is said to consider the $25 premium too high and with the government yet to issue rules that specify new fuel standards, traders say NNPC is likely to pick the cheaper fuel grades with more sulphur after the July deadline has passed.
The lack of government guidance casts doubt on plans to import cleaner fuel for the rest of the year as NNPC was under no obligation to buy the more expensive gasoline, the trading sources said.
"They will have to issue circulars and new specification sheets," one importer said, adding none had yet been sent out.
NNPC could not immediately be reached for comment.
While disappointing health and environment campaigners, it is good news for refineries, particularly in Europe, which still export to Africa fuel that contains levels of sulphur that have been banned in the European Union and United States.