Contaminated Fuel: DPR Moves to Sanction Oando

No Comments » March 4th, 2008 posted by // Categories: Energy Development Project




Contaminated Fuel: DPR Moves to Sanction Oando

•Product tested, certified, company insists

By Chika Amanze-Nwachuku, 03.05.2008

The Department of Pet-roleum Resources (DPR) yesterday said that Oando Plc would be sanctioned for importing contaminated fuel into the country. The product inflicted damages to many vehicles in Lagos last week.

The DPR Director, Mr. Tony Chukwueke, accused Oando of importing blended Premium Motor Spirit (PMS) otherwise known as petrol, which contained about 20 per cent ethanol, which is far higher than the five per cent recommended blend ratio without enquiring from the supplier what the product was constituted of.

But in a swift reaction, Oando insisted that the product was subjected to Nigeria’s routine tests in line with industry specifications and standard upon arrival and was certified to be in accordance with the laid down specifications by relevant agencies including the DPR.

The indigenous company said it was as much a victim of the unfortunate incident as the issue of high ethanol content which was wilfully concealed from it (Oando) by the supplier.

Briefing newsmen at the agency’s Lagos office, Chuk-wueke blamed Oando for neglecting to find out from the supplier the content of the product knowing full well it was a blended product.

For its alleged failure to find out the content of the blended product before importing it into the country, the DPR director said Oando would be made to pay a fine that will be equivalent to the value of the product that was imported.

“For all the people that suffered damages as a result of this fuel, we are going to commit Oando to make preparation for all of them. On top of that, government is going to impose a fine that will ensure that non of the operators of the downstream sector will do this type of thing again and the fine that we are considering will be equivalent to the value of the product that was imported to serve as a strong deterrent to others.

“And like I said, it will help me also to strengthen the processes of DPR because I do understand a lot more what goes on in the downstream sector. It will help us to revamp the process. I am going to take a couple of key measures to ensure that this does not pass through the net again,” he said.

But explaining the development yesterday, Oando said it imported a cargo of 33,000 metric tonnes of petrol from Gunvor International BV, Amsterdam on January 9. According to the company, the product, which arrived Nigeria on February 14 was subjected to routine tests and was certified to meet the country’s specifications.

The company said that on receipt of complaints from some receivers about the product’s effects on cars, the product was subjected to further tests, which revealed the presence of an unspecified substance.

“We made further enquiries from Gunvor, who informed us that there was a high level of ethanol in the product. We requested load port samples to be retested and the retest confirmed this information on February 29. The issue of ethanol content was wilfully concealed from us by the supplier. Not being a material that forms part of the specification of Nigerian grade of gasoline (petrol) we do not test for ethanol content and there was no indication in the original certificate of quality issued at load port of its presence,” the company said.

It said that following the series of complaints, it immediately mopped up the product from circulation and stopped its further sale to consumers.
“We have, however, used our best endeavours to contain the situation and we are currently working with the DPR and other marketers to effectively evacuate the quarantined product to ensure that none of the product remains within the system.

“Oando is as much a victim of this unfortunate incident, as many Nigerians who have been adversely affected by this occurrence, We have accordingly commenced necessary legal action with a view to ensuring that the supplier of the product assume full responsibility for damages caused to vehicles as a result of use of the product. We affirm our commitment to delivering quality products to all our esteemed customers” the company said.

However, the DPR boss, who argued that the problem would have been averted if the content of the blended product was detected by asking, vowed that if in the course of investigation, it was discovered that there were lapses on the part of officials of the agency, they will be severely sanctioned.

Chukwueke, who also confirmed that the department had ordered that the about 14,000 metric tonnes of the bad product be back-loaded to the supplier and its bridging to the Northern part stopped, said the Pipelines and Product Marketing Company (PPMC) had been directed to increase the volume of fuel import to make up the shortfall.

He said: “The proportion of ethanol content in the blended fuel is about 20 per cent which far exceeds what will normally be allowed. In fact, in the blend that we normally use in the PMS, which we use in Nigeria will probably not be more than five per cent at the most, because most operators in the industry understand that the vehicular use in Nigeria is particularly sensitive to alcohol and that most of our vehicles cannot handle anything more than 10 per cent of alcohol in their engine.

“I have also tried to make enquires as to how come Oando bought a product from a blender knowing quite well that this product it is buying is blended and did not know what the blend is constituted of. The responsibility for this fuel coming into the country lies squarely on that of Oando.
“Although, Nigeria because of her special requirement allows a large volume of the budget product into the country this time, disallowing blended fuel to enter the country, it is the responsibility of the importer to indicate exactly what it is importing, which is this blended fuel but this has not happened in this case.”

The DPR, he said, would continue with “this investigation and if I find that there is any part of our DPR organisation that through one way or the other had known but decided to avoid the work he was supposed to do, we will take very drastic action in this regard.

“What I have to do is to continue to reassure the public that we will do everything to bring confidence. We have directed that all the products in circulation right now that was actually discharged should be returned. A total of 14,000 metric tonnes is being pumped out from the tanks as I speak to you. We have also stopped the product that was supposed to come from this consignment to the Northern part of the country.

“We have stopped that bridging fuel from going forward. And we are trying to address alternatives to bring better fuel that meet our specification to various parts of the country to replace this.

“If we have to continue to allow blended fuel because of the so called scarcity of direct refinery product, then we have to ensure that we get an undertaking or a letter of assurance from the importer on what exactly the constituent of the blend it is importing is.

We have to consider if it is not necessary to in particular have a special test for ethanol although I understand this could be a long tedious process, but we have to see how we can bring that to bear in the process that we employ giving assurance to our people that the product we bring in is indeed genuine”, the DPR boss stressed.

He however, said that the foreign company that sold the contaminated petrol to Oando had been barred from further exporting products into the country.


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