NUPENG Strike, Refineries’ Closure Caused Products Scarcity – NNPC

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  • NUPENG Strike, Refineries’ Closure Caused Products Scarcity

The current hiccups in the supply of petroleum products is due to the recent one-day industrial action by the Nigeria Union of Petroleum and Natural Gas Workers and the shutdown of the nation’s refineries, the Nigerian National Petroleum Corporation has said.

Many Nigerians had complained of kerosene and diesel scarcity, with some Abuja motorists on Sunday forming long queues at filling stations.

Two out of the country’s three refineries were completely dormant in November 2016.

Explaining why there had been some problems with products’ supply across the country, the Group General Manager, Group Public Affairs Division, NNPC, Mr. Ndu Ughamadu, told our correspondent on Sunday that things were already improving as the situation was being addressed by the corporation.

He said, “We issued a statement on Friday that one of the implications of the one-day warning strike by NUPENG was that there was no loading from various depots nationwide and that created a slight gap. Loading resumed immediately after the strike was called off and you know if tanker drivers don’t load in a day, the implication is that there may be hiccups here and there. But things are normalising.

“Secondly, the three refineries were down for a couple of weeks and they resumed production about a fortnight ago. They are producing enough diesel now in addition to what we are importing to complement indigenous production; likewise kerosene.

“Many filling stations are now selling kerosene, unlike what we had some 10 days ago, when the stations were not dispensing because the local refineries were not pumping the product. But right now, the three refineries have resumed the production of kerosene and many filling stations have started getting products and are dispensing.”

Meanwhile, the price of Nigeria’s largest crude oil export grade, Qua Iboe, has been slashed in a bid to woo buyers as many cargoes for February loading programme remain unsold.

The country’s oil differentials fell to their lowest in more than a year on Friday as surplus cargoes struggled to find outlets in a market oversupplied with light crude oil, according to Reuters.

Despite an Indian tender absorbing several Nigerian oil grades, around 25 February loading cargoes were still looking for homes less than a week before the next loading programme was due.

Sellers slashed premiums for Qua Iboe to as low as 50 cents per barrel versus dated Brent, with traded values expected below that. Brent crude, the global oil benchmark, was trading around $55.45 per barrel.

After the cuts, Oando and Trafigura managed to sell Qua Iboe cargoes for mid- and end-February loading, respectively. Litasco and Total purchased them at prices that traders said were below 50 cent premiums.

The unreliability of loading plans, with Qua Iboe exports delayed due to strike action late last year, also made buyers less keen to take it.

Bonny Light offers were scarce, but traders said its value was also under pressure along with most of Nigeria’s export programme.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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