According to a Reuters report, some of Nigeria’s vessels, about 75 ships with two and half a million tonnes of petrol was stuck on the high sea.Although some have arrived a month ago, their frustrated owners have almost given up hope and started to offer their fuel to buyers outside Nigeria due to the lack of dollars to pay for the cargoes.
A plummet in world oil prices has knocked Nigeria’s state income and because crude sales are the government’s main source of revenue the fall has caused crippling shortages of dollars within the economy that have been hurting businesses for months.
Nigeria consumes 45 million litres of gasoline a day, or roughly 280,000 barrels, which would require the market to provide some $18 million a day. Though importers cover about 30 percent of this, with the state oil firm covering the rest, it is still a big strain on the market for dollars.
The naira has already weakened due to the spike in demand for dollars from fuel importers. Last week, the U.S. currency fell to N324 on the parallel market, whereas the official exchange rate has been held firm just under N200.
“The risk is that the parallel rate will depreciate even more, giving the marketers a pretext for yet further price increases at the pump,” said Alan Cameron, an economist covering Africa with Exotix Partners.
President Muhammadu Buhari has resisted calls by the International Monetary Fund (IMF) to devalue the naira, though Vice President Yemi Osinbajo speculated that a devaluation may be on the cards when he said the Central Bank has to change its policies.
Nigeria’s production dropped this month to 1.65 million barrels per day from 2.2 million and risks slumping to its lowest since 1970.
In an effort to address the looming fuel shortages, the Nigerian National Petroleum Corporation (NNPC) has begun talks with at least three international firms to swap more of its crude for gasoline, according to traders and oil executives.
But the drop in output due to the unrest in the Delta – as well as the fact oil firms take more physical cargoes as payment for services when prices are low – means the NNPC has less crude to swap for fuel.
“There aren’t enough cargoes available to NNPC,” said Dolapo Oni, head of energy research at Ecobank. “I don’t see how it can get more from international oil companies.”