Nigeria cuts fuel sulfur cap
Nigeria will cut the level of sulfur allowed in imported fuels this year, according to oil trading sources, but the cap is still 10 times above what health campaigners urge.
In oil-for-product exchange contracts, state oil company NNPC has asked for diesel and gasoline at a maximum of 500 ppm sulfur, trade sources said.
NNPC last year outlined a plan to gradually cut the allowed sulfur to 50 ppm for diesel and 150 ppm for gasoline by the end of 2019, from 3,000 ppm and 1,500 ppm, respectively.
Some 40 companies have been shortlisted for the contracts, dubbed direct sale, direct purchase (DSDP), and have until the end of the day on Thursday to submit their pricing to supply the fuels, the trade sources said. The contracts are expected to begin in late August or September.
NNPC did not respond to a request for comment.
Nigeria relies almost entirely on imported fuels due to limited and poorly maintained refineries. The country also caps prices for gasoline, which means the government would pay directly if it mandates higher-quality fuel.
The United Nations Environment Programme and health campaigners have pressed West African nations to ban fuels above 50 ppm due to evidence of significant health problems associated with the emissions. The health impacts are particularly acute in dense urban areas such as Lagos.
Thus far only Ghana has made good on the pledge to cut the imported sulfur cap to 50 ppm.
Experts said Nigeria's new limits would change little, as few global refineries produce gasoline or diesel above 500 ppm.
"Given the relatively low sulfur content of gasoline currently imported, the new sulfur limit will not have a marked effect – either on quality or price," said Jeremy Parker, the head of business development with Africa-focused consultancy Citac. (Additional reporting by Julia Payne Editing by Alexandra Hudson)
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