© 2019 - International Centre for Investigative Reporting
Investigation: How delayed implementation of dirty fuel ban costs Nigerians billions
IT is the second time in two years that Mr. Adewumi Alabi, a federal civil servant in Abuja, would cough out over N200,000 to replace the damaged engine of his Acura MDX 2008 model car. The Acura is his second car in the last four years that has developed engine problem less than two years after he bought it as ‘Tokunbo’ (a vernacular for ‘used’ goods) from the United States. An average of 5,706 used cars are imported monthly into Nigeria from the US, according to August 2018 stats from the US Department of Commerce, Office of Transportation and Machinery.
Though his damaged car engine is scheduled to be replaced with the new one in Abuja, Alabi travelled over 700km to the Ladipo Auto Spare Parts Market in Lagos, one of the biggest auto parts markets in Africa, to buy the engine on the advice of his new mechanic. Although it would take at least one week for it to be delivered to Abuja, Alabi did not mind.
Ladipo is one of the places to buy a variety of original auto parts and imported machinery, including automotive engines upon arrival in Lagos before they are transported countrywide, according to the Nigerian Port data.
The lesson learnt from the way his former mechanic handled the spoilt Mitsubishi car engine made him dump the mechanic. The man literally replaced the faulty engine with a ‘dead engine’. This time, he opted to buy the engine himself from Lagos.
“Before my Acura MDX engine completely broke down, I saw signs although I didn’t know the consequence. Signs of false gauge readings, high fuel consumption and emission from the car,” Alabi told Daily Trust on Sunday.
At Apo Mechanic Village, a bustling automobile spare parts market in Abuja where his Acura MDX engine would be fixed, he was told by Bisi, his new mechanic, that a thorough diagnosis of the car showed that the engine had sustained a serious damage.
The mechanic said the damage was caused by a prolonged use of contaminated fuel. He added that several taxi drivers who were his clients had also complained about similar problem linked to poor quality of fuel.
According to the National Bureau of Statistics (NBS), in 2018, Nigerians spent N135billion in 10 months to import parts and accessories, including car engines. When compared to 2017, the stats show that expenses on imported automobile spare parts have significantly increased.
This amount could be small when compared to what Nigerian car owners spend yearly on unplanned car maintenance or the cost to fix faulty engines caused by prolonged use of dirty fuel.
A cross section of car owners interviewed said the cost of fixing damaged engine ranged from N50, 000 to N500, 000, depending on the car model, the engine type and the nature of the repair, among other factors.
Only a few Nigerian car owners know that fuel that is high in sulphur (dirty fuel) could be responsible for damaged car engines. It starts with frequent engine failures.
The devil is in the fuel
Our reporter, therefore, spent several months investigating sulphur levels in the fuel imported into the country and found that the gasoline or premium motor spirit, (PMS), commonly called petrol, shipped into Nigeria from abroad contains sulphur level that is 86 times higher than the European limit and far above the limit set by Nigerian regulatory authorities.
According to the International Organisation of Motor Vehicle Manufacturers (OICA), the chemical called sulphur is a common impurity in both gasoline and diesel, which causes undesirable emissions of sulphur dioxide and trioxide (a poisonous gas with a characteristic rotten egg smell).
The OICA, which is the world’s authoritative forum on automotive issues, stated on its website that sulphur could lead to higher emissions and fuel consumption, and could permanently damage the device.
Sulphur, according to the U.S Environmental Protection Agency (EPA), is a natural component in crude oil that is present in gasoline and diesel, unless removed.
The Asian Clean Fuels Association (ACFA), in one of its monthly publications, stated that high sulphur in gasoline damages cars’ emission control systems and contributes to air pollution.
Although no publicly known research in Nigeria has established that high sulphur fuel usage causes damage to car engines, elsewhere, it has been proven to harm car engines.
For instance, in April this year, a few cars belonging to the police of West Palm Beach in South Florida, United States, reportedly broke down with engine failure. Six months later, 87 police cars had to have their engines replaced, costing the city $1.1 million.
City Administrator Jeff Green said an outside group came in to investigate the cause and found that the gasoline was bad, causing the engines to fail.
Four years ago, thousands of drivers in northwest Indiana and southern Illinois, US were hit by hefty car repair bills after a national chain sold contaminated gasoline. According to local news reports, scores of drivers began coming to repair shops reporting hard-starting and stalling engines, “check engine” lights, odd noises and other signs of engine trouble.
One of the affected motorists said in her lawsuit against fuel supplier, BP, that she bought more than $50 worth of gasoline for her 2008 Nissan SUV and that the next day, her vehicle started shaking, with the engine vibrating. Two days later, her SUV wouldn’t start in the morning. Days following the incident, BP recalled the bad fuel and said it would pay for repairs.
Lab analysis confirms high sulphur in PMS imported into Nigeria.
Our reporter took petrol sample from a Nigerian National Petroleum Corporation (NNPC) filling station in Apapa, Lagos, for laboratory analysis to determine the level of sulphur, which is the most important contaminant in fuel and found to have the most direct implications for health and the environment. The fuel sample was chosen from an NNPC outlet some kilometres away from the Apapa and Tin Can Island ports in Lagos because more than 80 per cent of petroleum product imports come through the two ports. The Apapa and Tin Can ports, according to NBS latest data, are Nigeria’s leading ports, with Apapa accounting for 51.2 per cent and Tin-Can Island 21.9 per cent of products imported into the country as at Q2 of 2018.
The fuel sample was collected from an NNPC outlet because in Nigeria’s current fuel supply chain, the NNPC is the country’s sole supplier of petroleum products, according to the junior oil minister, Ibe Kachikwu and NNPC Group Managing Director, Maikanti Baru. The NNPC imports the fuel through its downstream arm, then supplies substantial volumes to private marketers, known collectively as Major Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN), who altogether own hundreds of retail outlets in the country.
On the instruction of the chemist, 100ml of fuel sample was collected in two clean and transparent 50ml glass bottles. Because the bottles had openings, which allowed easy filling and then immediately closed, the petrol station attendant filled the bottles to 100 per cent capacity. The fuel sample was immediately taken to Intertek Nigeria Laboratory, located on Marine Road, GRA, Apapa, a few kilometres from the NNPC filling station.
Intertek is independent and internationally accredited, and one of the worlds’ leading petroleum testing services provider.
Our reporter had previously approached Nigeria’s standards regulator, the Standards Organisation of Nigeria (SON), Chemical Technology Laboratory in Lekki, Lagos, to conduct the sulphur test, but an official of the organisation said the agency, as at that time, did not have a sulphur analyser, the machine normally used to conduct the test.
The head of Chemical Technology Group of the agency asked our reporter by mail to direct further inquiries to the director, Laboratory Services, M.B Kehinde, who did not reply to emails and messages. But Intertek, which prides itself as an industry leader with over 130 years of experience in petroleum product testing and “with more than 43,000 employees in 1,000 locations in over 100 countries,” said its experts and global resources were equipped to meet testing, timeline and product needs.
“The petroleum testing labs follow ASTM, ISO, IP and other recognised petroleum test methods and regulatory protocols,” the company states on its website.
The fuel sample was then analysed for sulphur, using the ASTM method. The ASTM International, known as American Society for Testing and Materials, is an international standards organisation that develops and publishes voluntary consensus technical standards. Test methods for sulphur are specified by ISO and ASTM international standards.
When completed, the test result showed sulphur levels in the petrol sample to be up to 860 parts per million (ppm), which is 86 times above Europe’s 10ppm limit. The sulphur content in the gasoline, according to the test result, is beyond the 150ppm limit set by the SON last year.
Plans to end dirty fuel import suffers
On December 1, 2016, Nigeria, Benin, Togo, Ghana and Cote d’Ivoire agreed to ban Europe’s dirty fuels, limiting sulphur in fuels from 3,000ppm to 50ppm. The then Minister of Environment for Nigeria, Mrs. Amina Mohammed, said Nigeria and other African nations had decided that the sulphur in fuels imported should be reduced from 3000ppm to 50ppm, starting from July 1, 2017.
“Everybody knows that this is going to take some efforts, which is why we gave the six-month notice,” she said.
In April 2017, the SON, the body responsible for setting standards for imported goods, released new specification for petroleum products imports in Nigeria. After consultations with stakeholders, the agency announced that it had reduced the maximum allowed levels of sulphur in petroleum fuels imported into Nigeria, in line with the world trend. It said that from July 1, 2017, diesel fuel should have maximum sulphur levels of 50 ppm while gasoline should have maximum sulphur levels of 150 ppm.
But that was not to be because the government failed to enforce the ban on importation of high sulphur fuels after the July deadline.
Later, the Nigerian government, through the NNPC, announced again that it would cut the sulphur allowed in diesel by July 1 and petrol by October 2018 respectively. NNPC’s chief operating officer, Refineries and Petrochemicals, Mr. Anibor Kragha, was quoted by Reuters in March 2018 to have said in a presentation to the African Refiners Association (ARA), that the country would lower sulphur in diesel to 50ppm from 3000ppm by the 1st of July while petrol sulphur level cuts would start in October, moving to 300ppm from 1, 000 ppm. He said Nigeria was targeting a cut to 150ppm by October 1, 2019.
But the result of the test conducted by Daily Trust on Sunday showed that this has not happened. It is indeed business as usual as high sulphur fuels continue to flood Nigeria, to the detriment of its consumers and the Nigerian environment. Sulphur in gasoline is currently above the 300ppm target set by NNPC.
World’s capital for dirty fuel
The result of the test comparatively showed that gasoline imported into Nigeria has one of the highest sulphur contents among those shipped to other African countries. Not a single drop of the gasoline sold in Nigeria could legally be sold in some parts of Africa, let alone in Europe, from where most of the gasoline is imported.
In September 2016, the Public Eye, a Swiss non-governmental organisation, exposed how European trading companies were exploiting the weak regulatory standards in African countries to import fuels with sulphur levels up to 300 times higher than was permitted in Europe. After the revelation, most West African governments immediately set tighter limits for sulphur in fuels and kept to the deadline, one of them being Ghana.
Even before the Public Eye revelation, the comparative analysis showed that the sulphur levels in gasoline sold at pumps in other African countries were lower when compared to Nigeria. For instance, the Public Eye found between 120-190ppm sulphur concentration in gasoline grades sold in Angola, Africa’s 2nd largest oil producer as at December 2013; 275-718ppm in Ghana as at May 2015 and 79-155ppm in February 2016 in Cote d’Ivoire.
But in Nigeria, the result from the test conducted by Daily Trust on Sunday showed 860ppm sulphur.
Rabiu Suleiman, a seasoned Nigerian refiner with over 30 years’ experience working in Nigerian refineries said every country’s aspiration is to have ultra-low sulphur fuels, but it comes at a price.
Suleiman, who is currently a senior technical adviser to the Minister of State for Petroleum Resources on Refineries and Downstream Infrastructure, said countries like Ghana could afford to import high-quality gasoline because they had deregulated the market.
“Therefore, the selling price per litre (in Ghana) is more than twice or three times what is sold in Nigeria. The lower the sulphur the higher the price and the more the subsidy upon it. So, the higher the sulphur the more you get discounts on the cost of importation of that product,” he said.
He said African countries, including Nigeria, couldn’t meet euro standard fuel because they were at different stages of development and investment.
“To be able to get to that standard, you must be able to build refineries that are modern and can refine crude that can take out sulphur by putting an additional unit in the refinery, called sulphurisation unit. Because most African countries don’t have sufficient resources to do that, the UNEP has given various waivers to different countries. So it won’t be right to look at European standards and expect African countries to meet that standard,” Suleiman said.
Oil exports versus imports: A crooked ratio
Nigeria produces around 2.2 million barrels of oil, according to the latest stats from the oil ministry, but most of this crude is exported. So, while the country is a net exporter of crude oil, it must import gasoline. The paradox worsens further when the quality of the crude exported and gasoline received are compared.
According to the secretary- general of the Africa Petroleum Producers Organisation (APPO), Mahaman Gaya, Nigeria produces one of the best grades of crude, known for their low sulphur content. “For example, the Bonny Light has more quality than Brent and WTI,” Gaya told our reporter.
The Nigerian Bonny Light has one of the lowest sulphur contents of all crudes, such that even with a simple refinery, one can get a higher amount of ultra-low sulphur fuels than from other grades of crude.
In 2017, Europe received 38.6 per cent of Nigeria’s crude export, NNPC’s operations report showed. The Netherlands bought 9 per cent of Nigeria’s total exports while 5 per cent went to the US Atlantic coast, according to the NNPC data. But what does Nigeria get in return? Analysis of the sample conducted by Daily Trust on Sunday showed high levels of sulphur.
Why dirty fuel import can’t stop now -NNPC, SON
The spokesman for the NNPC, Ndu Ughamadu, said the status quo had remained because “the revised SON specifications are not in effect yet because they have not been approved by the Federal Executive Council (FEC). As such, the current SON standard of 1000ppm still prevails.” He said the primary consideration for the FEC was the impact on the pump price that would result from the importation of the lower sulphur PMS.
Ughamadu added that the incremental cost of the lower sulphur PMS is not the issue but capacity of international suppliers to meet demand.
The SON, in its reaction, said the implementation of revised standards for fuel import it set last year had been delayed by the government.
“Implementation is directed by the government. What we have done on our part is to coordinate the development of the standard,” the spokesman for the agency, Bola Fashina, said.
“We have coordinated the stakeholders to develop the standard in line with international best practice. That is where our own job lies. The implementation is above the SON, it is the government that will declare it as mandatory and give power to those who are to regulate,” he added.
This investigation was supported by Ford Foundation and the International Centre for Investigative Reporting, ICIR.