The delay by the Nigerian National Petroleum Corporation, NNPC, to sign pending agreements for the exchange of crude oil for products as well as oil marketers inability to access the Dollar have set the nation on another path to fuel scarcity.
Oil marketers and local sources who spoke to Reuters news agency warned that new fuel bookings have shrunk with marketers left with fewer options for importing the product. One of the traders said the new petrol fixtures “has ground to a halt,” and that “Nothing is finalized … so there is literally zero discussion going on.”
The report revealed that the NNPC was trying to sign additional long-term contracts to cover well beyond the 210,000 bpd of oil that was exchanged in the past. This is coming after NNPC signed deals last year with refiners Total, Varo Energy, Cepsa and ENI to exchange oil directly for petrol and other products beginning in February.
Litasco, Noble and Total also secured “spot” swap contracts with NNPC via local joint ventures in February and March, including Sahara Energy Limited that also won spot swap deals in March.
Some trading houses and refineries were said to have met with NNPC officials in Abuja and London over the past month, promising that they can quickly move vessels with petrol to Nigeria. But negotiations are taking longer than expected, leaving a gap in imports.
“NNPC has managed to fulfill around 2.25 million tonnes,” one trader said, explaining that that left them around three quarters of a million tonnes short.
Reuters reports that there is some 200,000 tonnes of petrol berthed offshore Nigeria, but this covers just over a week of consumption in Nigeria. New March bookings have slowed to just over 100,000 tonnes – nowhere near what is required.
With the Naira falling on the parallel market by almost 50 per cent, oil marketers are not favourably disposed to making a move unless they have swap contracts in hand.
Commenting on the development, one of them simply told the news wire that, “We are all waiting”.
Meanwhile, the NNPC had this week issued a statement urging citizens not to panic, or hoard petrol, as it reassured consumers that it had enough product in stock.
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