The economic impact of fake and substandard oil on the global economy is valued in the billions of dollars. The business is tempting, it has cheap overhead and high profits and so the black market for fake goods is growing .
The counterfeits black market affects all types of good, from food products to toys, to cosmetics to jet fuels, you name it, it has a counterfeit.
In Kenya, millions of litres of crude oil has been barred from entering the country via an oil tanker on April Fools. News of the cargo ship, No. K07/2020 has just been released to local media saying was the oil tanker, MT Ocean Tiara belongs to a subsidiary company of a Nigerian oil giant and was seized after it berthed at Mombasa port waiting to moor and dump the fuel.
The tanker and its cargo have several discrepancies and the long arm of the law now has grabbed it in a choke hold.
First it is reported to have a much higher boiling point than it is allowed by the Bureau of Standards which has set it at 200 degrees Celsius. Well, the cargo manifest read that the cargo’s boiling point is 199.1 degrees but as it turned out, subsequent check of the fuel by the bureau of standard revealed that it had a boiling point of 204 degrees centigrade.
Kenyan authorities maintained a strict stance against the cargo saying the excess 4 degrees is simply unacceptable. According to the Kenyan Transport and Storage Agreement (TSA) that the authorities have entered with oil traders any excess in fuel boiling point automatically deems the cargo substandard.
Secondly was the matter of pricing. The oil cargo was priced at old oil rates that over valued the cargo. Local reports say the ship’s manifest set the cargo prices for the February rates while the price of oil has since gone down.
For now, the vessel is offshore the Kenyan coast pending the test results. To fight off the subsequent legal charges, the company called in its lawyers who demanded for another test. However, Kenyan authorities say, there is no way it will be allowed to moor that fuel into Kenya, despite lobbyists attempts to lure them to be lenient.
Dirty oil: lucrative dirty deals
Elsewhere, in Tanzania, the government has been dealing with such unscrupulous dealers attempting to dump large amounts of substandard oil into the country. Not only does this practice undermine fair trade rights of honest traders but it endangers business operations and even the safety of people.
In 2016, the government was force to suspend Sahara Tanzania Limited on allegations of contaminated jet fuel. The oil giant is globally renowned by its parent name the Sahara Group that is considered the leading African energy conglomerate. The government warned the company of the practice and it was also ordered to clean out and all its storage tanks and distribution pipes.
The oil giant refuted the claims and maintained that its oil was clean, “…we are not liable for the bad fuel as we discharged after being cleared by the TBS. We have just opted to assist the affected companies clean the tanks,” a company representative told media.
Similarly, Zambian media reported that, in Nigeria, Sahara energy was in the same year accused of causing a plane crash to supply of substandard jet fuel.
However as it would turnout, only the following year, in 2017, the company, Sahara Tanzania Ltd was allowed to commission a 36 Million Litres Petroleum Storage Facility in Dar es Salaam, Tanzania that is meant to facilitate distribution of petroleum products across the country.
The terminal is situated in the industrial area of Kigamboni and has the capacity to hold up to 18 million litres for Automotive Gas Oil (AGO) and another 18 million litres for Premium Motor Spirit (PMS).
With 6 loading arms for the PMS and 6 more for the AGO, the company wields the capacity to load an impressive 120 trucks per day. Weather the firm will remain on the good side of the law or face other dirty oil allegations remains to be seen.
Meanwhile, just a year after, in 2018, the Tanzania Bureau of Standards (TBS) again confiscated and destroyed over 400 litres of substandard oil lubricants that was found in distribution in the commercial capital of Dares Salaam.
According to local media, at least 78 percent of import fuels into Tanzania are substandard. The plight is the same across the continent in Nigeria where it is reported that 80 percent of products imported into the country are either fake or substandard.
For the case of Tanzania, it is feared that the county has a large coast line and numerous unofficial entry points making it difficult for authorities to monitor and control the black market.
Dirty fuels deny the country huge amounts in taxes and have adverse social and economic consequences. It is however up to the government to protect its public against substandard oils and other products.
Time and time again, engines fail or the sheer cost of frequent repairs places heavy financial burden on motorists. When it comes to commercial use in factories, dirty fuels have severe outcomes and spoil many engines and their body parts. Dirty fuels force companies to incur ever increasing maintenance cost.