Strikes continue, ports are closed
Gasoline tankers are unable to deliver supplies to Nigeria as strikes entering their fifth day have forced ports to close, trade and shipping sources said.
Nigerian workers have been on strike over the lifting of a popular fuel subsidy that has led to prices more than doubling at the pump.
“Ports are shut, so yes it is affecting things. Nothing in or out at the moment,” said a gasoline trader.
Nigeria is Africa’s largest oil exporter but relies on gasoline imports for around 85 percent of its domestic consumption because it lacks refining capacity.
Tankers are being held outside ports at the expense of charterers, who are paying demurrage costs of around $18,000 a day.
“People waiting there have a huge issue on their hands… around 1 mln tonnes of gasoline waiting to offload,” said a gasoline trader, adding he had cancelled plans to deliver two cargoes to Nigeria this week.
Demurrage costs are payable to a ship owner by a charterer for a delay for which the owner is not responsible. Shippers say these costs have not increased despite the current strike.
“They (Nigerian shipments) are fairly prone to delays anyway but even more than usual now with the strike. So far it’s fairly flat,” a shipping source said regarding demurrage costs.
COSTLY DELAYS
The OPEC member’s biggest oil union said it was ready to halt oil output if the government did not reinstate the subsidy, piling pressure on President Goodluck Jonathan to reach a compromise.
So far, strikes have not hit oil exports according to traders and oil officials, partly as some processes are automated or dependent on non-unionised workers operating platforms offshore.
Nigeria exports over 2 million barrels of crude oil per day and is a major supplier to the United States and Europe, providing Africa’s second-largest economy with over 90 percent of foreign exchange revenues.
The threat of a cut in oil output was a deciding factor in prompting the government to start negotiations with union leaders, sources said.
Worries over Nigerian oil supplies have helped push up global oil prices in the last two days.
Nigeria has typically relied on crude oil exports for around half of its gasoline needs through swap exchanges. Industry sources have said a number of key deals were renewed for 2012, including a 60,000 barrel a day deal with Swiss-based trading house Trafigura.
The other half is imported via regular tenders. In December, Nigeria was seeking to buy around 1.35 million tonnes of gasoline in the first three months of the year.
Trade unions said strikes would be suspended on Saturday and Sunday to allow leaders to travel for negotiations with the government, and it was not clear whether the suspension would enable vessels to discharge over the weekend.
Source: Reuters