Nigerian ethanol disaster results in sanctions on Oando, ban on Guvnor

In Nigeria, the federal government has placed sanctions on oil giant Oando, and banned Swiss importer Gunvor from the country, in the aftermath of a distribution of unlabeled E20. The 14,000 metric tonne distribution has left thousands of vehicles disabled.

Oando and Guvnor have each said they are not to blame for the fuel crisis. Oando did not conduct a test on the fuel to determine ethanol presence, saying that they had never ordered nor dealt previously with ethanol-blended fuel. Guvnor said that they routinely distribute ethanol-blended fuel.

The Nigerian Department of Petroleum Resources has started an investigation into how a load of unlabeled E20 reached the fuel supply. After the E20 was loaded into untreated tanks containing groundwater, the ethanol absorbed the water and every vehicle that used the blend was disabled or suffered engine damage. The government ordered all petrol to be taken off the market that showed possible signs of contamination.

The scandal is a setback to the plans of the Nigerian National Petroleum Corporation (NNPC) to ramp up ethanol production and distribution. NNPC approved development of the first commercial-scale plant in Nigeria. The Ondo state project will produce 145 Mgy of ethanol. Feedstock was not disclosed, but cassava has been reportedly the prime feedstock candidate.

Nigeria has been moving into high gear in ethanol production development. The Minister of Commerce and Industry said last month that Nigeria is building five new sugar plants and has the potential to become a leading ethanol producer. He noted new new sugar plants are being built in Jigawa, Bauchi, Taraba, Kogi and Lagos states.

Nigeria produces 50,000 tonnes of sugar out of a total consumption of 1.176 million tonnes. The National Sugar Development Council (NSDC) has requested a Presidential Initiative to construct six regional facilities producing 100,000 tons of sugar, 5 Mgy of sugar ethanol, and 25 MW of power for the factory and the national grid.

The government of Nasarawa State has allocated $27 million to improve agricultural production including ethanol processing. The state said that it would construct an Agro Export Conditioning Centre at Keffi and establish a cassava ethanol processing plant at Doma, in conjunction with international investors.

Recently, Oloche Edache, FAO regional representative for Africa, said that Nigeria will require a 70 to 80 per cent increase in food supplies to meet its food requirements by 2015. He added that the national emphasis on biofuels development, carried out as a part of Nigeria’s commitments under the Kyoto Treaty, would put upward pressure on agricultural prices for the next decade. Nigeria has planned $876 million in agricultural development funding over the next four years.

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