There has been a steady surge in fuel importation to Nigeria with more inflows expected from Europe in the months to come.
Trading sources told Platts, a global energy information website, at the weekend that one of the main reasons for the strong demand has been the increased buying interest from Nigeria.
The country has four refineries which could reduce petroleum products importation by up to 50 per cent but the refineries have struggled to remain afloat and have been unable to churn out products in appreciable quantities since the Nigeria National Petroleum Corporation (NNPC) announced they were back.
For instance, the 37-year-old Warri refinery has remained shut since August due to some technical hitches in one of its units.
The NNPC Group Managing Director, Dr Ibe Kachikwu gave a 90 days ultimatum to the refineries to stream back to full active service or be sold.
There are plans to build new refineries because existing ones are close to 30-40 years old but for now, sources said, massive fuel imports will continue because the refineries are yet to hit optimal output and demands are beginning to rise.
The importation trend could continue up to the end of the year as the festive season approaches, a season when fuel consumption, is usually high. In early September, the Petroleum Product Pricing Regulatory Agency (PPPRA) reportedly issued additional import allocations for, at least, 300,000 tonnes of petrol for the remainder of the third quarter.
This was on top of 1.5 million metric tonnes of existing petrol import allocations for the third quarter and is related to slow domestic refinery output, as well as to increased demand, sources told Platts.
The allocations, which enable the companies that hold them to import fuel under the country’s subsidy regime, are in addition to the 1.5m tonnes issued for the third quarter earlier this year to, at least, 37 importers.