The Nigeria National Petroleum Corporation (NNPC) has skipped the import allocation for the month of October due to the current debate of fuel subsidy removal, analyst says.The import allocation for the fourth quarter is supposed to be out early October or at least mid- October of the year, but they are still not out, trade sources told Reuters.Another reason that may likely affect the fuel import allocation could be the oversupply of refined fuel which was held in offshore floating storage. Reuters sources on Monday said currently the fuel at floating storage surges to record levels.Effort to clarify the reason behind the delay in releasing the allocations from the Group General Manager, Public Affairs Division of the NNPC, Dr Levi Ajuonuma proved abortive as his phone was off when our reporter called.About half of the country's yearly gasoline needs are imported through swap exchanges arranged by a subsidiary of state-run Nigerian National Petroleum Corporation (NNPC), according to traders. The other half is organised independently through deals with Nigeria-based distributors.The debates at the National Assembly about subsidies and an excess supply of fuel stored offshore have put a spanner in the allocation talks for this quarter, traders said, which could drag on into next year.'These allocations should have been out by October or mid-October but they're not out still,' one trader said. 'There are two key things being looked at - the deregulation talks and the oversupply currently in the market.'The debate is expected to prove controversial as many Nigerians regard cheap fuel as the only benefit they get from living in an oil-rich nation. Proposed fuel price increases in the past led to nationwide strikes.Nigeria obtains gasoline via two routes. The NNPC has swap agreements with providers to exchange crude oil for refined fuel products, and through the Petroleum Products Pricing Regulatory Agency (PPPRA) it awards allocations to different suppliers.Nigeria's gasoline consumption has increased over recent years amid steady economic growth, with gross domestic product expected to rise by about 7 percent this year.Monthly consumption of the motor fuel is around one million tonnes, a trader said.NNPC data suggests Nigeria imported in excess of five million tonnes of premium motor spirit or petrol last year, although traders said that does not take into account the PPPRA allocations.An excess of gasoline in floating storage offshore has tempered demand from the PPPRA this quarter, according to traders.One trader estimated there is around 1.3 million tonnes of gasoline floating off the coast of Nigeria, or some 45 mid-range cargo ships carrying roughly 30,000 tonnes each. This is well in excess of the almost one million tonnes held at the previous peak in May.'We are seeing the usual delays in Nigeria - there is enough product offshore to chew through,' said a gasoline broker.The over-supply could provide rich pickings for pirates in the Gulf of Guinea. An oil products tanker was hijacked a week ago in the latest of a string of attacks in the emerging trading hub.The removal of the subsidy could also mean a consolidation of the government's several oil agencies into one overseeing organisation, a trader said.
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