Continued uncertainty over the future of clean product import licenses in Nigeria is affecting current loadings of Nigerian-grade gasoline in Europe, sources said this week.
"For March delivery, everything is okay," a gasoline source with exposure to the market said. "But we're now looking at cargoes with mid-March loading dates, meaning they'd be delivered in April. Nothing has been made official for April, so it's making it difficult to sell at this stage."
Nigeria suspended many of its fuel import licenses in January, particularly for gasoline, following a general strike protesting the price of clean product imports in to the oil-rich country.
President Goodluck Jonathan's decision to suspend a key fuel subsidy prompted the strike over the cost of refined fuel products in the country, which has four refineries but still imports the majority of its refined products, largely from the Antwerp-Rotterdam-Amsterdam refining region in Northwest Europe.
On March 1, the Petroleum Products Pricing Regulatory Agency announced that they were in the process of reviewing permit applications from companies for the importation of gasoline cargoes for the second quarter.
However, European traders said that continued uncertainty over the status of the permits has caused trading to falter, as any cargoes loading in mid-March would arrive in Nigeria in April.
"If you start loading now, we're coming in to an April delivery, and you don't know what will happen," another European gasoline trader said. "We saw what happened in January when the government tried to stop the fuel subsidies. A lot of people had vessels on the way, but were able to turn them around and take the product back to tank. If something similar happens again, it could be a disaster for a lot of companies."
Additionally, on Tuesday, the Nigerian National Petroleum Corp, which handles fuel imports in to the country, said that bureaucratic bottlenecks at Nigerian ports have contributed to gasoline product shortages.
"They haven't imported anything like their normal supply for awhile," another European source said. "We saw activity last week, but it's slowed down again, and it's still not at the volumes we would expect. There's been a bit of limbo about when demand will be back."
Since January's general strike, the NNPC has imported the majority of its refined petroleum products like gasoline, gasoil and jet fuel through swap exchanges for the country's crude oil.
"There's a bit of a lack of product right now," the second trader added.
"Until mid-to-late February, all of the fuel was coming from the swaps agreement with the rest of the imports on standby. While the exchange has started again, there's still less oil around than before."
Demurrage for incoming products vessels off-loading in Nigeria is not a new problem, European traders said, with sources reporting waits of between 20 and 40 days for incoming gasoline cargoes before the January general strike.
Fuel shortages have been reported in a number of cities in the West African country, including the capital Abuja.
