In a sign that the scarcity of petrol in Nigeria could be more widespread than first expected, the Nigerian National Petroleum Corporation has issued a spot tender seeking 1,480,000 metric tonnes of petrol from January to April, on top of the existing term volumes it imports.
Nigeria imports around one million to1.25 million mt of petrol every month to meet national demand estimated at 35 million to 40 million litres per day, according to Platts.
These import requirements are expected to increase further due to the current situation.
It is rare for the NNPC to issue a tender for petrol imports and sources said the move highlighted the significance of the shortages.
The latest tender shows the NNPC is concerned that the supply crisis might get worse, and in a bid to cover its requirements it is tendering for more spot petrol.
The NNPC accounts for more than 90 per cent of the petrol imported into the country through the direct sale of crude and direct purchase of refined products model.
Some traders remained sceptical that these tender volumes will be delivered on time on top of the DSDP volumes as the import terminals in the country are already experiencing severe vessel traffic.
The tender is reportedly restricted to companies which were selected in 2017 to participate in the DSDP programme.
The standoff over imports between the Federal Government and private fuel marketers over pricing has been one of the reasons for the current predicament.
When news arose of the shortfall, there was a lot of panic buying, which exacerbated the situation.
The ports of Lagos and other import terminals have also experienced bottlenecking, which is worsening fuel availability.
Nigeria primarily imports petrol from Europe, though flows from the US and Asia have risen steadily over the past few years.
Sources also said the arbitrage to send petrol from Northwest Europe is not economically viable, which could dampen the enthusiasm of some trading companies.
“There is still good demand for petrol into Africa, especially Nigeria, but these arbitrages do not look workable from Northwest Europe,” a trader active in the petrol market said.
The NNPC said last week it would sell petrol cargoes directly to private fuel marketers in a move to end fuel shortages.
This was the outcome of a government investigation into the product shortage that nearly crippled economic and social activities in the country in the past four weeks, the spokesman said.
The NNPC fuel cargoes were previously sold to private depot owners who in turn sold to marketers.
Nigeria boasts four state-owned refineries around the country, but these plants’ operations are unreliable, making the country heavily reliant on petrol and diesel imports.
The NNPC’s refineries have a combined 445,000 barrels-per-day nameplate capacity, but have failed to operate at even a fraction of that the last five years.