Petrol scarcity in the offing, as FG seeks to swap more oil

Nigeria is on the verge of another round of petrol shortages as the decline in oil prices have left one of Africa’s largest crude producers with fewer options for importing fuel, Reuters reports.

Traders and local sources have warned that new petrol bookings have shrunk as importers cannot get the dollars needed to buy and state oil firm NNPC has not been able to sign agreements quickly enough to exchange crude oil for petrol. Furthermore, none of the NNPC’s four refinery complexes have run consistently, making Nigeria as reliant as ever on imports. NNPC reported a $1.3 billion loss in 2015, forcing it to increase its direct petrol imports to more than 70% of the country’s needs versus about half previously.

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. Companies including Litasco, Noble and Total had secured “spot” swap contracts with NNPC via local joint ventures in February and March. Sahara, an old hand in the swap deals, also won spot swap deals in March. However, the NNPC is trying to sign additional long-term contracts to cover well beyond the 210,000 bpd of oil that was exchanged in the past. Trading houses and refineries are eager for these; but negotiations are taking longer than expected, leaving a gap in imports.

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