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Oil Rises After Choppy Start To The Week

Oil Rises After Choppy Start To The Week

Oil prices rose by roughly…

Nigeria Finally Moves To Cut Sulfur In Fuels, A Year After Deadline

Nigeria gasoline

West Africa’s biggest fuel consumer Nigeria will start reducing the sulfur levels allowed in fuel imports in July 2018, a year after a July 2017 deadline it had initially pledged to meet, according to a presentation by the Nigerian National Petroleum Corporation (NNPC).

Nigeria will cut the maximum allowed level of sulfur in diesel to 50 parts per million (ppm), from 3,000 ppm by July 1, NNPC’s chief operating officer of refineries and petrochemicals, Anibor O. Kragha, said in a presentation to the African Refiners Association (ARA), as carried by Reuters.

For gasoline, Nigeria will start cutting sulfur levels in October this year, to 300 ppm from 1,000 ppm. The sulfur level in gasoline will then be cut to 150 ppm by October 1, 2019, according to the NNPC presentation.

Nigeria, which imports 60 percent of West Africa’s fuel imports, was part of the countries that pledged in December 2016 to adopt low sulfur diesel standards, as per the United Nations Environment Programme (UNEP) guidance. Back then, Nigeria agreed to import low sulfur diesel fuels—with sulfur content capped at 50 ppm—from July 1, 2017, while its refineries were granted waivers to upgrade their facilities to produce low sulfur fuels by 2020. Nigeria, Togo, Benin, and Cote d’Ivoire joined Ghana, which had already committed to implement low sulfur diesel standards from March 2017.

Related: Glut Or Deficit: Where Are Oil Markets Headed?

The UNEP has campaigned for low sulfur fuels in developing and transitioning nations that have been far behind the developed countries who outlawed sulfur content above 10 ppm years ago.

Now Nigeria is also pushing back the domestic refinery waivers to 2021, NNPC’s Kragha says.

The official said that “significant costs” complicated Nigeria’s efforts to meet the previously agreed-to UN deadline.

Cleaner gasoline standards will cost Nigeria US$11.7 million each month to meet the first maximum level of 300 ppm, and the second reduction to 150 ppm will cost US$15.7 million per month. The diesel reduction will cost US$2.8 million monthly, according to NNPC.

Nigeria has a cap on gasoline prices, so the government will likely bear much of the initial cost for cleaner gas, while consumers will be paying for the low-sulfur diesel as diesel prices are deregulated, Reuters noted.

By Tsvetana Paraskova for Oilprice.com

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