•Substantial backlog of gasoline offshore WAF • Outstanding subsidy claims still to be approved by Assembly • Fuel marketers being denied credit facilities by banks
Despite the acute fuel shortages and associated transport glitches and business lull in the country, trading sources declare that massive cargoes of the highly desired premium motor spirit float around the marine territories between Nigeria and Togo.
According to Platts market intelligence reports monitored in Lagos, West Africa currently has a substantial backlog of gasoline cargoes waiting offshore Togo and Nigeria.
In recent weeks, a large loading program of gasoline in Northwest Europe has resulted in large amounts of gasoline available in the offshore Lome market, as West African importers were keen to buy on the back of the Nigerian last quarter import allocations.
However, sources said the persistent uncertainty around the ability to open letters of credit as well as the lack of foreign exchange in the country meant these cargoes were waiting outside the ports for now.
Some sources in the wholesale gasoline markets said the gasoline shortage in Nigeria could be due to a “disruption in distribution” while others firmly attributed it to a “lack of dollars” in the country.
“There are already queues and the problem is only the dollars,” a source said.
Nigeria continues to rely on imports for its petroleum product needs due to low output from NNPC-operated refineries.
None of the four refineries, with a combined nameplate capacity to refine 445,000 b/d of crude, are currently running due to technical problems and sabotage of pipelines feeding the refineries with crude, NNPC officials said.
Nigeria, Africa’s largest crude oil producer, relies heavily on imports for its fuel needs.
The four state-run refineries operated only at 1.96% of their nameplate capacity of 445,000 b/d in September compared with 22.3% in August, according to NNPC data.
Nigeria has been hit by a fresh round of fuel shortages after the country’s main fuel marketers were denied credit facilities by banks, and as a result have had to delay placing orders for clean cargoes of gasoline under the government’s fourth-quarter import program, marketers said Wednesday.
Sources among marketers said the shortages have risen as the payment of Naira 413 billion to domestic fuel marketers in outstanding subsidy claims for petrol imports have still not been approved by the Central Bank.
In late October, Nigeria’s Petroleum Products Pricing Regulatory Agency (PPPRA) issued allocations for imports of over 1.8 million mt of gasoline for the fourth quarter, but the country’s main fuel importers said banks have declined to honor the government’s sovereign debt fund since it was not backed by cash.
“Our members can’t import now because of the failure of the government to release the Naira 413 billion outstanding subsidy claims on previous [gasoline] imports,” spokesman for the Major Oil Marketers Association of Nigeria (MOMAN), Femi Olawore, said.
MOMAN’s members include the local downstream arm of Total and ExxonMobil, as well Oando, Conoil and MRS. They account for more than 40% of Nigeria’s total gasoline imports.
However, Minister of State for Petroleum, Dr. Emmanuel Kachikwu, had stated that President Muhammadu Buhari had sent a letter to the National Assembly for the legislative approval of the subsidy claims, saying the Central Bank would make the funds available to marketers once approved by the National Assembly.
Three weeks ago, government approved the immediate payment of the Naira 413 billion to marketers, but the debts have not been cleared.