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Kragha: Powering tokunbo vehicles with dirty fuel is deadly

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Kragha

Executive Secretary, African Refiners and Distributors Association (ARDA) Anibor Kragha, in this interview with KINGSLEY JEREMIAH underscores implications of Africa’s energy outlook, the high level of sulfur in petroleum products, looming health and environmental concerns and infrastructural challenges in the downstream sector of the continent’s petroleum industry.

The African Union and the African Refiners and Distributors Association have repeatedly raised concern about the issue of clean fuel on the continent. What are plans to mitigate the looming danger associated with this challenge?
The projection of the International Energy Agency (IEA) has shown that by 2040, one of every two persons born in the world is going to be African. Population growth in Africa is expected to grow exponentially through the next 20 years. This means incremental energy demand. We are going to drive more cars; need more cooling systems, increased electricity needs for home and industrial use.

For 2019, the total petroleum product demand in Africa per day was just about four million barrels. An average of 61 per cent of that is imported into the continent. If you project going forward, that demand is going to continue to grow. These developments should compel us to start looking at the kind of products that are being imported into the continent, and refined in the continent. Without focusing on these issues, we may be heading for a serious disaster.

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The African Union currently has a goal, which is focused on accelerated economic and industrial growth for the continent across all sectors. Now, they have a stand-alone Infrastructure and Energy Department, which aims at integrating Africa such that we have refining hubs, and infrastructure such as pipelines.

The African Refiners and Distributors Association has been working along with the AU to harmonise fuel specs in line with global standards (Euro V or AFRI 6 – 10 ppm sulphur). Since with increased population comes increased energy demand, this demand will lead to increased pollution and attendant increase in public health issues if Africa does not transit to cleaner fuels as soon as possible.

These cleaner fuel specs recommend the adoption of AFRI 5 (50 ppm sulphur for gasoline and diesel) by 2025 and AFRI 6 specs (10 ppm for same products) by 2030. The objective is to stop the importation of fuels that do not meet these AFRI specs into Africa by 2021, and to give existing refineries until 2025 to upgrade their facilities to produce cleaner specs.

The ECOWAS Council of Ministers of Hydrocarbons in February 2020, recommended product imports to meet AFRI 5 specs by 2021, and ECOWAS refineries to meet AFRI 5 specs by 2025.

We stared the process towards the end of last year. It has to go through a validation process, after which it can now be ratified and adopted.

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Unfortunately, COVID happened this year. But of course, with technology, we’re able to hold three consultative workshops with various stakeholders from across the continent to articulate views on the roadmap. By December, we are expecting to present the report before a specialised Technical Committee of African energy ministers for the final validation before it goes before the Permanent Representative Committee of the African Union. We are hoping that the adoption would be possible early next year.

How serious is the problem of dirty fuel in Africa, especially Nigeria?
It is a major issue, and I know that there have been a lot of studies out there that have examined the issue. What we are trying to promote is ensuring that we engage with all the parties that are engaged in refining, storage and distribution operation across the continent and impress on them, the need to engage in world’s best practices in their operations going forward so that we can ensure that whatever is produced meets the Afri fuel standard, and that is why we’re targeting that. So we’re open to anybody who’s involved in these activities to engage with us. We are working holistically with the African Union to ensure that we engage all the refiners. We are already sending out letters to all refiners across the continent. We need to reduce the sulfur content in our fuel.

What would you say are the direct impacts of this high sulphur-laden fuel?
Let me make it more practical. There was a time in Africa when we knew somebody, who knew somebody, who had cancer. Now, it’s very different. Everybody knows somebody either in his/her direct family, or a close relative. That is as a direct result of air pollution. In fact, someone in the National Council of Clean Transportation mentioned the fact that Africa has some of the highest particulate matter globally, which causes pollution and pollution directly relates to disease. And of course, it is worse when you drive dirty fuel in dirty vehicles. It is deadly. You are going to have higher pollution. Some figures have cited that about 94 per cent of vehicles imported into Nigeria are used vehicles. We have the same situation in some other African countries. Who is checking the restrictions on age? As we look at cleaner fuel, we need to focus on cleaner vehicles too. Most of the vehicles we drive don’t have emissions controls. We need a structure that ensures that we have clean vehicle on our roads. There has to be a minimum age of vehicles allowed on our roads, and there has to be a way of checking the emissions

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What is your take on the downstream sector of the petroleum industry in Africa?
I think you have to look at where we are today, and to project where we’re trying to get to. But let me immediately add that we must, as a matter of necessity, have an African Energy Security Plan. We need policies that maximise the use of African crude oil in oil refineries such that we can produce cleaner fuel, push it through our storage and infrastructure to African consumers. All of these need finance from African financial institutions.

The United Nations Environmental Programme had mentioned that by 2040, we would have about three billion vehicles in Africa. That’s a massive market. So, what do I see, apart from refineries, we have terminals; we have pipelines, and all the way to the retail filling stations. These present huge opportunities for investments across the downstream and I believe that today, and in the future, Africa has huge potential in the downstream market. The entire value chain has a huge potential, and our role is to encourage investments, particularly sustainable investments. It is painful that most of the crude from the continent are exported to other parts of the world.

How exactly can this sector create wealth and economic development for the continent, especially Nigeria?
We must stop the importation of petroleum products or minimise it. Let us put in place a footprint that maximises transport fuel because no matter how you look at it, transport fuel is a major part of Africa. Fossil fuel is also going to play a dominant role in Africa. In fact, in totality, apart from India, Africa, as a whole will consume more crude oil than anywhere else, even more than China.

One of the presenters during the ARA week, recently, talked about the refineries of the future. Around the world, people are doing not just petroleum, but petrochemicals, plastics and plastics are taking off detergents. We’re talking about so many additional values, and the idea is to add as much value to every molecule as you can across the continent so as to increase our petrochemical industry significantly.

We also need to upgrade existing refineries to produce cleaner fuels, and be more energy efficient in order to reduce the carbon footprints.

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In addition to this, there must be massive investments in petrochemical because that is where we truly can create jobs and add more value. It is very important to ensure that any manufacturer on the continent that is looking for a propetyln gets it from the continent rather than import it. If they are also looking for other petrochemicals that are needed for car manufacturing, they should not have to import them. In summary, first and foremost, we have to revamp existing refineries infrastructure to produce and transport cleaner fuels such that we reduce fuel importation. Again, I must restate that we need massive push towards investments in petrochemicals so as to add value to our gas and to diversify our economy.

This conversation is coming at a time when it is difficult to find investment, especially in regions like Africa where ease of doing business is a critical issue. What needs to change for these investments to come?
Let me remind you again that one in two people born now through 2040 is going to be African. The market is here. We only need to put in place the product that the market needs, and how do we ensure that we can secure the funding required to do that? One of the things that we are doing with the African Union is not just talking about the issue with the refineries, we are also working to put together, a register of projects for upgrading these refineries and engaging key multilateral agencies across Africa; African Development Bank, Africa Finance Corporation etc., to try and put in place funding to help drive all these and ultimately other investments that would follow.

In general, what are the challenges facing the downstream sector?
I think the primary one is financing. Countries are bothered about how to raise money to build infrastructure needed for the sector. The reality is that with funding, we can maximise the crude that are stranded in our country, add value to it, and find a way to export the finished products.

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