Why Some Imported Petrol Dry Up Fast — Economist

Kelvin Emmanuel, an Economist,  has attributed the poor performance of most imported Premium Motor Spirit (PMS) sold in Nigeria to weak regulations, poor quality control, and the importation of substandard blended fuel products.

Emmanuel made the claims on Tuesday as a guest on Channels Television’s breakfast programme, The Morning Brief, where he questioned the effectiveness of the oversight function of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

According to him, the Petroleum Industry Act (PIA) mandates the regulator to maintain functional laboratories at ports of entry to test imported petroleum products before discharge.

These tests, he said, were meant to cover critical parameters including distillation levels, cloud point, flash point, octane rating, and sulphur content, noting that pricing in the petroleum industry is directly linked to product quality.

“Does the regulator have labs at the ports of entry?” Emmanuel asked. “Based on the regulatory gazette provided by the PIA, the regulator is supposed to have a lab where samples of products are taken when the vessel is approaching the ports.”

He further questioned the authenticity of certificates of quality issued for imported products, arguing that a forensic audit of such documents may not stand scrutiny.

“There is airtight evidence to show that what is happening today is that Togo has floating storage vessels of about two million metric tons, about 2.6 billion litres, where products are blended,” he said.

Emmanuel alleged that a significant portion of these products originates from Russia following the 2022 invasion of Ukraine and the subsequent sanctions imposed by the G7, which capped Russian crude oil prices at $45 per barrel and excluded Russian banks from the SWIFT financial system.

He claimed that Nigerian traders, working with international partners, purchase crude oil and condensates from Russian ports such as Primorsky Krai and Novorossiysk, as well as from Kazakhstan.

According to him, the crude feedstock is blended and refined into naphtha, a base compound that is not fit for direct consumption, before being chemically altered using C5 resins and shipped into Nigeria.

“If you test those products, you will realise that the sulphur level for most of them is over 800 parts per million,” Emmanuel said, adding that octane levels are often low.

He explained that this poor-quality fuel is the reason many Nigerians observe that petrol burns faster than expected and causes frequent engine problems.

Emmanuel also referenced a 2020 ECOWAS agreement, which set a harmonised sulphur limit of 50 parts per million for petrol sold within the sub-region, questioning whether imported products meet this standard.

He cited Section 3:17 of the Petroleum Industry Act, which, he said, obligates the regulator to review import licences once a domestic refiner demonstrates the capacity to meet Nigeria’s consumption needs.

“The only person who is obeying the PIA is Dangote,” he stated, adding that the refinery has surpassed Nigeria’s daily consumption requirements but is being frustrated by regulatory actions.

READ ALSO: Expect Further Reduction In Petrol Prices, Dangote Assures Nigerians

Emmanuel called for an independent, third-party audit involving regulators, external auditors, and industry players to test petroleum products and determine whether they comply with standards stipulated under the PIA.

The allegation comes on the heels of recent unsettling comments by entrepreneur and President of Dangote Group, Aliko Dangote.

Dangote, while highlighting quality differences between locally refined fuel and imported products, on Sunday, had accused oil marketers of importing low-quality petrol.

“Nigerians have a choice: to buy better-quality fuel at a more affordable price, or to buy blended PMS at a higher rate. Importers can continue to lose, as long as Nigerians benefit, I am happy,” Dangote said.