Why refined products standard is critical to Africa

A move by the African Refiners & Distributors Association (ARA), and the African Union (AU), to ensure common standard for the importation and refining of petroleum products on the continent remains critical to trade, environment and the economy of the region, stakeholders said, Wednesday.

Under the plan, Africa is expected to adopt harmonized AFRI Clean Fuel Specifications across. The Cleaner Fuel spec recommends adoption of AFRI five (50 ppm sulphur for gasoline and diesel) by 2025, and AFRI 6 spec (10 ppm for same products) by 2030.

ARA Executive Secretary, Anibor Kragha, had told The Guardian that the objective is to stop the importation of fuels not meeting these AFRI specs into Africa by 2021, and give existing refineries until 2025 to upgrade their facilities to produce the cleaner specs.

This comes when a number of refineries are already springing up in Nigeria, even as the Nigerian National Petroleum Corporation (NNPC), also considers rehabilitating its existing refineries.

Kragha disclosed that the Economic Community of West African States (ECOWAS) Council of Ministers of Hydrocarbons in February 2020 already recommended product imports to meet AFRI five specs by 2021, and regional refineries to meet AFRI five specs by 2025.

While some stakeholders are concerned about the poor implementation of existing regulations in Nigeria, they noted that the new standard would allow petroleum products to be moved easily across Africa.

They also noted that the development would create uniform trade deals, boost pan African collaboration and allow uniform framework for implementation.

Recently, Stakeholders Democracy Network (SDN), had claimed that samples of petrol from illegal refineries in the Niger Delta were of a higher quality than imported equivalents, alleging that fuel exported from Europe exceeded EU pollution limits by as much as 204 times.

Although the standard currently being used in Nigeria is 150 ppm for petrol, the stakeholders condemned the regulation, saying it is 15 times higher than the EU standard.

Kragha said that AU and ARA had jointly held a virtual Consultative Forum with key stakeholders across the continent, including NNPC, Department of Petroleum Resources (DPR), ECOWAS, SAR of Senegal, NPA of Ghana, NOC of Ethiopia, Sonangol, SAPIA of South Africa, Sasol, UNEP, and others.

He revealed that the stakeholders’ input would be submitted to the AU Technical Meeting of African Energy Ministers in October, adding that two more consultative sessions are planned for July 13, and July 30, ahead of the report submission in August/September.

According to him, ARA also planned to develop a register of projects for upgrading refineries and infrastructure across Africa and engage financiers, including the African Development Finance Institutions like Asian Development Bank, Afrexim Bank, and the Africa Finance Corporation, to secure the required funding for these critical upgrade projects.

“Another key focus area is for African countries, especially those sharing common fuel supply chains, to develop an integrated policy covering both fuel quality and vehicle exhaust emissions to achieve the ultimate objective of Clean Air in our African cities. Without this integrated, coordinated policy, the objective of clean air will not be realized whether by imports or local production,” Kragha stated.

But Adeola Adenikinju of the Department of Economics, and Centre for Petroleum, Energy Economics and Law, University of Ibadan, said the development was lauded, especially if all the countries on the continent could sign up to the new standard.

Stating that Nigeria is supposed to be at the vanguard of pushing for such a standard, Adenikinju noted that allowing for a uniform model across the continent is vital to trade.

He said: “We have standards in Nigeria; but our problem is implementation. DPR and other agencies have standard quality but those products still come into the country without meeting specifications. That is a key area we need to look at.

“Even when we have the common standard, if we don’t work on our implementation, enforcement and sanction we won’t achieve the desired objectives. One, we cannot guarantee it, and other African countries won’t trust our products even when that common standard is there. It will affect our ability to trade.”

PricewaterhouseCoopers’s Associate Director, Energy, Utilities and Resources, Habeeb Jaiyeola, warned that Nigeria cannot afford to overlook the regulation at a time when private and other modular refineries are being built.

He stressed the need for the specifications to put local realities across the countries into consideration, urging Nigeria to review existing regulations to ensure that proper preparation was made for the success of such a plan.

To him, the challenges of climate change and other environmental issues on the continent is unacceptable, therefore the need to keep to global best practices is necessary.

The Guardian Nigeria