Nigerian gasoline imports still low after subsidy deal

Import levels of West African grade gasoline in Nigeria were low, sources said Wednesday, despite a deal reached early last week between marketers and the federal government to resolve a dispute over outstanding subsidy payments that had seen imports grind to a halt.

The marketers -- which account for more than 40% of Nigeria's gasoline imports -- were demanding that the government pay N200 billion ($1.05 billion) in subsidy claims and May 25 confirmed a deal had been reached with the government to resume imports.

However, sources said Wednesday that imports into Nigeria -- which typically imports about 1 million mt/month making it the region's largest importer of gasoline -- continued "at a trickle," due to little guidance from the new government inaugurated Friday.

Importers and distribution companies were seeking more solid assurances over the payment of the outstanding subsidy, sources said, a signal that last week's deal had not managed to restore confidence.

The government pays a subsidy on the imports, which is the difference between the landing cost of the fuel and the officially regulated domestic pump prices.

The arbitrage from Northwest Europe to West Africa has acquired increasing importance in recent months, as structurally shrinking arbitrage opportunities to the US Atlantic Coast and the Persian Gulf have limited outlets for Europe's net-long gasoline market.

"Nothing has been done recently...[it's] quiet," said a European trading source, referring to trading of Northwest European gasoline cargoes to West Africa.

The FOB Amsterdam-Rotterdam 10 ppm premium unleaded gasoline barges -- a pricing benchmark for the lower-octane, higher-sulfur WAF-grade -- were assessed at $700/mt Tuesday, up from $693.25/mt Monday.