The Federal Government might be in for gloomy days as lingering decline in demand for the nation’s crude oil shows it might not be able to fund items in its 2016 fiscal policy.

Many buyers are dumping Nigeria’s crude for substitute from Angola, forcing the country, recently, to search for buyers for 80 crude cargoes worth N3.5522bn. If the gloomy outlook continues, government might have to look beyond oil revenue to execute projects under the 2016 budget estimates. Of 20 crude cargoes, only one was sold in November, even as the country is still struggling to find buyers for N2.679bn worth of the commodity.

The demand for Nigeria’s crude had been on the decline since price began a free fall last year. Specifically, about 35 million barrels remained unsold at the international market, last December. This came at a time when crude production dropped by 17,300 barrel per day, from 1,919m barrel per day recorded in November to 1.902m barrel per day in the same month.

The decline in sales has been attributed to the switch to Angola’s crude grades by Asian countries. It will be recalled also that the United States stopped buying Nigerian crude, in preference for its own huge stock of Shale.

Nigeria’s oil stock for December has already gone on sale. Two weeks after, however, it is still available. According to reports, the total of unsold cargoes, last month, stood at 20, dropping to 15 cargoes, last week, according to trade sources. The little differential was attributed to trend in gasoline refining, which slightly increased demand for Nigeria’s Light Sweet crude.

A peep into the country’s crude performance at the market revealed that Exxon Mobil sold a Very Large Crude Carrier (VLCC) of Qua Iboe and Zafira oil to international oil companies via a tender, while Total sold one VLCC load of Brass and Pazflor. Trafigura supplied a cargo of Bonny Light to Pertamina through a tender.

The decline in demand for Sweet Crude comes on the heels of downturn in production, as only about 63.34 million barrels of crude and condensate were produced in August, representing an average daily production of 2.04 million barrels.

This, according to the Nigerian National Petroleum Corporation (NNPC), represented a decline in production by about 6.16 per cent in July. All parties lifted a total of about 65.2 million barrels of crude oil and condensate in the same month, while NNPC lifted 21.5 million barrels on behalf of the federation.

•Excerpted from a Guardian report. Photo shows Finance Minister Kemi Adeosun.

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