Nigeria seen missing July target to buy cleaner fuel

Nigeria’s state-run oil company will keep buying cheaper, lower-quality gasoline for now because the government has yet to circulate new rules forcing a switch by July to cleaner fuels with less sulphur content, trading sources said on Tuesday.

Nigeria, an oil producer that relies on imports of refined fuels, had said it would raise standards for gasoline and other fuels imports from July 1, a move backed by the UN Environment Programme which has pushed for using cleaner fuel in the region.

Large contracts swapping Nigerian crude for refined products signed in recent days between state-run Nigerian National Petroleum Company (NNPC) and major traders offered premiums of as much as $25 a tonne for cleaner fuels with less sulphur, traders said.

With the government yet to issue rules that specify new fuel standards, traders said NNPC was likely to pick the cheaper fuel grades with more sulphur after the July deadline has passed.

The lack of government guidance casts doubt on plans to import cleaner fuel for the rest of the year as NNPC was under no obligation to buy the more expensive gasoline, the trading sources said.

“They will have to issue circulars and new specification sheets,” one importer said, adding none had yet been sent out.

NNPC could not immediately be reached for comment. (RTRS)