allAfrica.com: Nigeria: DPR Caught Napping Over Ethanol Crisis (Page 1 of 2)

Just as the federal government pumps billions of Naira into the fuel ethanol initiative of the Nigerian National Petroleum Corporation (NNPC), the suitability of the technically challenging fuel alternative in the local environment was last week called to question by the effects on grade of cars and sundry machines that dominate the Nigerian market.

Stakeholders in the nation's fuel market last week keenly followed the drama of bulk passing and trade of accusations between the Department of Petroleum Resources (DPR), Gunvor International BV of Amsterdam and Nigeria's comity of major petroleum products marketers which syndicated bulk importation of petrol through Oando Trading, subsidiary of Oando Plc.

Confusion exploded in the fuel market when customers of Mobil Nigeria Plc inundated the company with complaints of damages brought about by fuel purchased at the company's retail outlets, prompting the company to declare the suspicion on the quality of the product from which other marketers had shared from.

Similar complaints also reached the management of other major marketers but by fewer customers, also prompting collaboration among the major marketers and DPR in launching detailed investigation on the integrity of the product that formed the common denominator of the complaints.

Public complaints also forced the DPR to bare its teeth against those behind the importation, declining to own up to any culpability in the blunder.

According to the conditions for landing imported products issued by the regulatory agency to marketers in the country upon the deregulation of the market in2003, the importer must submit the certificate of quality to DPR two weeks ahead of thw arrival of the import vessel. The reception depot must also provide a standard liboratory for spot testing of the product sample before it is discharged.

Also the discharge of imported products must be done under the physical inspection of the field officials of DPR.

These arrangements are meant to guarantee fool proof assurance that the quality of products imported into the country remained the same or alter within acceptable range attributable to weather impacts from the port of loading to the port of discharge.

But last week the product which contained 20 percent ethanol was certified by the DPR ahead of its arrival in Nigeria as required by regulation; it was also authorized to discharge to depots upon arrival in Nigeria after undergoing routine tests and scaling quality hurdles mounted by the regulator.

The strange element that crashed engine components had remained a mystery to the team of DPR technocrats and fuel market experts for a few days before the component of ethanol became visible; and being directly under the furnace of public anger, Mobil had to proceed with samples to Abidjan for detailed analysis as to the ratio of ethanol to petrol.

The result from Abidjan had shown that the fuel contained 20 percent ethanol, a ratio DPR said was too high for the local environment where recommendation for ethanol ratio in petrol is limited to 10 percent.

Following the disclosure of the fuel's high ethanol volume, the Director of DPR, Mr. Tony Chukwueke, rolled out a string of penal measures on both the onshore and offshore marketers involved in the importation of the fuel.

Starting with Oando, Mr. Chukwueke ordered the company to mop up the product from the market backload same and send it back to the source of import. In addition, he said Oando would pay for the damages caused by the fuel to motorists in the local environment. He also ordered the company to pay statutory fine equivalent to the cost of the 33, 000 metric tons of petrol.

For Gunvor International, both Oando and DPR are demanding pound of flesh. Whereas DPR banned further imports from the Swiss firm, Oando is seeking judicial remedy that would ultimately transfer the entire load of liability from DPR to it, insisting that the international dealer concealed the volume of ethanol in the fuel at the point of purchase.

Oando is also battling to clean its name of the stains of the controversial fuel, inferring strongly in statement that it relied on the technical supervision and oversight of DPR to confirm the integrity of the product right from the load port to discharge port.

Indeed, in an Approval to Discharge, of February 19, DPR's Lekwot Y. cleared the controversial product to be offloaded from MT Norte. The recertification details indicated that the product had marketable odour, undyed colour 181 degree Celsius flashpoint and density ratio of 0.7614 at 15 degree Celsius.

"Oando is as much victim of this unfortunate incident, as many other Nigerians who have been adversely affected by this occurrence. We have accordingly commenced necessary legal action with the view to ensuring that the suppliers of the product assume full responsibility for damages caused to vehicles as a result of use of the product."

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