Nigeria: NNPC Offers U.S.$1 Discount Per Barrel to Attract More Buyers for Oil

Daily Trust Abuja Daniel Adugbo
Displayed with permission from allAfrica.com

The Nigeria National Petroleum Corporation (NNPC) has cut the price of every type of crude it sells in an effort to regain share of the global oil market.

The corporation reduced by at least $1 per barrel its official selling prices (OSPs) for 20 out of 26 Nigeria’s oil grades.

According to the pricing lists monitored by Bloomberg, Qua Iboe, Nigeria’s largest export crude was reduced the most.

Bonny Light and Forcados are among those also offered at a discount.

The Group General Manager of NNPC’s Crude Oil Marketing Division (COMD), Mele Kyari, said by phone that the price reductions were due to a « huge cargo overhang » as the country attempted to regain market share.

Nigeria’s crude shipments are gradually resuming after militants attacks crumbled production.

Lower prices are a sign Nigeria is seeking to become more competitive in an already oversupplied global market.

The price reduction may not also be unconnected with the complaints of high official selling prices raised by five companies that market the nation’s crude.

But Kyari said, yesterday, that the pricing decisions were unrelated to those « complaints. »

Nigeria sells oil cargoes at government-set official prices to buyers. COMD quotes OSPs monthly for each of Nigeria’s 26 crude grades.

Typically, most of those grades would be supplied within a $2 dollar range above or below key benchmarks that typically track futures markets.

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