17 January 2012
Oil traders face lower profits or potential losses as a gasoline glut of around 1 million tonnes builds offshore
due to a dispute over a cut in petrol subsidies, which has pitched protesters against President Goodluck Jonathan. Nigeria
Around 30 vessels are now waiting to offload their gasoline cargoes, or just under 1 million tonnes of the refined product, according to trade sources. The product glut would have a market value of under $900 million, according to Reuters calculations based on benchmark European prices.
Exporters have been unable to offload fuel cargoes into Nigerian ports as strikes, which started about two weeks ago, have shut down the country.
President Jonathan on Monday made concessions to the protesters by partly reinstating the subsidy to cut the price of gasoline to N97 a litre, prompting the unions to suspend strikes.
The gasoline cargoes are still being kept offshore, however, due to the uncertainty surrounding the negotiations, as operators choose to wait and see before redirecting the product elsewhere.