Bad fuel: Forces behind the scam

By AYOOLA OLAOLUWA

Bola Atoyebi, a budding accountant, had celebrated entering the league of ‘Lagos Big Boys’ after securing a lucrative job as a senior accountant with Setrac, a multinational oil and gas company in Lagos, with the purchase of a brand new Toyota Highlander 2021 XLE AWD jeep some months back.

The acquisition didn’t come cheap. Against the advice of his parents who had instead wanted him to purchase a land and start building his own house, Atoyebi had channelled the N15million salary advance he was paid by his new employer to help him quickly settle down to work and a N9million facility secured from a bank, totalling N24million on the purchase.

Other expenses like vehicle registration and comprehensive insurance at 5% of the total value of the vehicle for a one-year cover pushed the fees he expended on the exotic jeep to over N25million.

However, the young oil executive would soon be hit by harsh reality when the engine of his newly bought vehicle suddenly stopped working without warning.

After about an hour of inspection and diagnosis by the mechanics called in to find a solution, a verdict was announced: The car’s engine has knocked and needs a replacement. And the culprit: Contaminated fuel in circulation.
Atoyebi’s hope of getting a replacement engine was dashed when his insurer informed him that his premium did not cover damages caused by fuel contamination.

The downcast executive is left with no other option than to source for the N6.5million bill for the procurement and installation of another engine, accessories and labour.

Atoyebi was not the only one affected by the havoc caused by the contaminated fuel allegedly imported into the country by the Nigerian National Petroleum Corporation (NNPC). Hundreds of Nigerians were also affected.

BH investigation revealed that apart from many vehicles which developed fault after using the toxic fuel, many machineries, including tricycles, motorcycles, electricity generators, fuel pumps and grinding machines, among many others were also affected.

This toxic fuel debacle is the latest of the many scandals that are currently challenging the already stretched nation to its very foundation.

A viral video had last week circulated on social media showing a manager of a Satellite Town branch of Mobil Filling Station lamenting the damage done to his station and motorists vehicles by fuel supplied it by the NNPC.

According to the perplexed manager, the contaminated fuel, apart from damaging six of his fuel pumps, also damaged the engines of several vehicles that bought the product from his station.

He further revealed that the station got the contaminated fuel from the Salonia Depot which also claimed to have purchased it from the NNPC.

Several videos of the havoc caused by the fuel also surfaced online, including one recorded by a staff of 11 Plc who claimed his station in Lagos was shut because the bad product it bought from a major depot destroyed the company’s pumps, customers’ automobiles and other equipment.

The situation caused petrol scarcity across the country, particularly in Lagos, Oyo, Ogun States as well as the FCT after the rejection of new supplies from importers of the adulterated fuel by filling stations who shut their stations.

The furore generated by the scandal generated a nationwide outrage, which forced those fingered to scamper for safety, while loudly professing their innocence.

Throwing the first salvo, the Chief Executive Officer/Group Managing Director of NNPC, Mr Mele Kyari, accused three companies, MRS, Oando, Duke Oil and the Emadeb/Hyde/AY Maikifi/Brittania-U Consortium of importing the PMS cargoes with high methanol into the country.

Kyari explained that the bad fuel was imported under the Direct-Sale-Direct-Purchase (DSDP) suppliers by: 1 MRS — MT Bow Pioneer — LITASCO Terminal, Antwerp-Belgium; 2 Emadeb/Hyde/AY Maikifi/Brittania-U Consortium —- MT Tom Hilde — LITASCO Terminal, Antwerp-Belgium; 3 Oando — MT Elka Apollon — LITASCO Terminal, Antwerp-Belgium and 4 Duke Oil — MT Nord Gainer — LITASCO Terminal, Antwerp-Belgium.

Another regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), while confirming that petrol, with methanol quantities above Nigeria’s specification was discovered in the supply chain, absolved itself of blame, noting that the agency does not test for ethanol.

The defunct Department of Petroleum Resources (DPR) had in 2008 also claimed that it did not test for ethanol, which was not part of the specification of Nigeria grade for gasoline after suppliers shipped off-spec petrol into the country.

However, three of the four firms fingered by the NNPC GMD, MRS, Emadeb, Brittania-U and Oando vehemently denied importing the high methanol petrol into the country.

MRS, in its is own response, said it would never be involved in the purchase, importation, distribution or marketing of substandard petroleum products in the country.

It, however, put the blame on the doorsteps of the NNPC, claiming it was one of the victims of the bad fuel from the national oil firm which it supplied to eight of its stations in Lagos.
“Due to the current subsidy regime, NNPC is the sole supplier of all PMS in Nigeria.

Consequently, the NNPC through their trading arm, Duke Oil, supplied a cargo of PMS purchased from international trader Litasco and delivered it with Motor Tanker (MT) Nord Gainer. This vessel discharged in Apapa between the 24th and 30th of January, 2022.”

Likewise, Brittania-U also denied involvement in the importation of the off-spec petrol in circulation.

According to the firm, its products which arrived the country between Januarh 4 to 19, 2022, through five daughter vessels, were only discharged after being duly certified by NNPC as meeting specifications.

“Brittania-U management is aware of the publication by Emadeb/Hyde/AYMaikifi consortium partners. While we do not want to join issues with these companies, we want to affirm that what they stated does not relate to the issues at hand.

“Our imported products from our mother vessel, MT Torm Hilde, met all NNPC/NMDPRA product specifications, and we’re duly cleared by DPR (now NMDPRA) in line with Appendix 1 of the NNPC-DSDP Agreement.

“All the PMS from our mother vessel, MT Torm Hilde were discharged with all relevant certificate of quality after laboratory analysis as it was adjudged lead-free, ethanol-free, water-free, suspended matter-free and had a sulphur content of 0.0174 as against 0.05, which is within the acceptable content allowable by Nigerian Midstream and Downstream Authority,” the company explained.

In it’s own defense, Emadeb-consortium exonerated itself from having a hand in the importation of bad fuel, saying listing it among those partly responsible for the importation of the off-specification petrol by the NNPC was misleading.

The consortium, led by Emadeb Energy Services Limited, urged the NNPC to single out Brittania-U, an initial member of the coalition, which it claimed opted out of the arrangement instead of lumping everyone in the consortium together.

Oando PLC on it’s part, denied any involvement in the importation of methanol-blended petrol into the country.

“Following media reports listing Oando as one of four importers that supplied methanol-blended Premium Motor Spirits (PMS) into the country, we hereby state that Oando did not import and supply PMS that was adulterated or substandard. The PMS supplied by Oando met Nigeria’s import specification.

“We are committed to working assiduously with the NNPC and industry to identify the root cause(s) of the subsequent contamination of the PMS supplied.

“We want to assure the public that Oando as a responsible corporate citizen would not partake in the importation, distribution, or marketing of substandard petroleum products,” the company stated.

However, rather than resolving the matter, the accusations and counter accusations by implicated parties is muddling up things, with Nigerians not knowing who or what to believe.
But Business Hallmark reliably gathered from informed sources in the petroldum industry that Duke Oil, solely owned by the NNPC, was responsible for bringing the contaminated PMS into the country.

The sources, while maintaining that the NNPC GMD was only trying to be clever by half by lumping the blame on some other DSDP contractors, insisted that the NNPC, through its trading subsidiary, Duke Oil, is the most likely source of the entire bad fuel.

“You can see that Duke Oil, unlike others companies named in the scandal, has not come out to defend itself. It knows it is guilty and that there was no need to waste time giving excuses.

“Also, the NNPC GMD has kept quiet since three of the companies he named as culprits have come out to deny the accusations. Kyari has been economical with the truth. He knows that he and his colleagues at the NNPC are in deep trouble. There is no way of wriggling out of this mess”, declared one of the sources.

Founded in 1985 to serve as an intermediary between the NNPC and international oil traders, Duke Oil Company Incorporated (DOCI) was registered in Panama in 1989 during the administration of former military ruler, Gen. Ibrahim Babangida (retd).

According to its profile on LinkedIn, Duke Oil is the arm of NNPC responsible for direct oil trading activities to achieve operating capability, downstream integration and additional profit from oil.

“The company was formed by NNPC as part of a comprehensive review of its structural and business requirements necessary to achieve the corporation’s desire for a financially strong and independent integrated international oil and gas company,” the profile reads.

Initially based at the NNPC’s office on Hammersmith Road, London, Duke Oil moved to Dubai in 2019, its financial records stated.
BH checks revealed that the trading firm has no employees of its own. Its directors and other staff are usually provided by other NNPC group entities under service agreements.

For instance, the GMD and the Chief Financial Officer (CFO) of the NNPC, Mele Kyari and Umar Ajiya doubles as directors of Duke Oil.
Other directors from the NNPC Group include Umar Aminu, Lawal Sade, Lawrencia Ndupu, Muhamad Suleiman, Adokiye Tombomieye, and Philomena Ikoko. Adekunle Adegun serves as secretary to the board.

Efforts to speak to the Group General Manager (GHM), Group Public Affairs Division of NNPC, Kennie Obateru, proved abortive as he did not answer his calls, nor replied text messages sent to his line.