The Nigeria National Petroleum Corporation (NNPC) has cut the price of every variant of its crude oil by at least $1 a barrel in a bid to boost sales and regain market share.
According to Bloomberg, the country has been recording a huge glut of cargoes, and traders had been complaining that the country’s oil prices were not competitive for challenging times.
Mele Kyari, general manager of the crude oil marketing division at NNPC, said last week that the state-owned oil company was aware of the complaints of traders to cut prices.
“We are aware; we have received several communications with our off-takers on this,” he said.
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“We are assessing the comments to either validate or disprove it because sometimes you can’t be sure of the validity of these claims.”
As at Thursday, Bloomberg data showed that the NNPC had lowered by at least $1 a barrel the official selling prices of 20 out of 26 oil grades.
Qua Iboe, Nigeria’s largest export crude under normal circumstances, was reduced by the most since 2014.
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Kyari said the price reductions were due to a “huge cargo overhang”.
This is coming at a time when Nigeria’s oil output is moving towards its lowest point in 27 years.
Nigeria is also facing its worst economic recession in 29 years due to a slump in oil prices, the mainstay of the local economy, and vandalism of oil facilities in the Niger Delta region.
With the Brent crude, the international benchmark for oil, trading at $51.62 per barrel, Nigeria is expected to sell at a price much lower than the global market price.
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