Global Markets: Oil Traders Said to Mull Nigerian Proposal to Prolong Fuels Swap

(Bloomberg) — At least five oil consortiums said they were considering a proposal from the state-run Nigeria National Petroleum Corp. to prolong a crude-for-fuels swap program until the middle of next year, people familiar with the matter said.

Extending the swap would allow the West African country to ensure a vital, steady inflow of products like gasoline and diesel since the program accounts for more than half the nation’s imports. The consortiums have yet to agree the terms NNPC offered, the people said.

Nigeria is still heavily reliant on foreign deliveries of refined fuels because the nation’s own refineries don’t make enough to cover domestic demand. Petroleum minister Emmanuel Kachikwu told the BBC in May last year that he would resign if the country wasn’t self sufficient in processed products by 2019. Subsequently he said achieving the goal would depend on help from unions and other factors.

The swap contracts, known as Direct Sale Direct Purchase, started in July 2017 and were originally meant to last a year. Calls to NNPC officials in Abuja were not immediately answered.

With assistance from Elisha Bala-Gbogbo. To contact the reporters on this story: Laura Hurst in London at lhurst3@bloomberg.net; Sherry Su in London at lsu23@bloomberg.net. To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net John Deane.

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