Nigeria is not only struggling to produce enough crude oil to sell but one of its biggest customers; India is now getting offers from Russia to buy at a cheaper rate.
Over the last few years, India has been the biggest buyer of Nigerian oil, committing over N1 trillion in 2021.
Russia is currently auctioning its crude oil below market price to willing buyers after US and European countries cut off Nigeria’s oil revenue.
Bayelsa Times report that Russian oil exports to India have quadrupled in March 2022 due to the a $25-30 a barrel discount to the official price of oil which is at $107 per barrel(Brent crude price).
Russia is now looking to sell around 15 million barrels of cheap crude oil to India this year.
Russia is currently facing sanctions imposed by the Western nations over its decision to launch a military operation in Ukraine.
Indian Petroleum and Natural Gas Minister, Hardeep Singh Puri, is very satisfied with the deals as it also includes Russia accepting to pay in rupees or with rubles.
Indian Oil Corporation (IOC) has already bought 3 million barrels of Russian Urals from trader Vitol for May delivery.
India may also import as much as 2 million tonnes (mt), or roughly 15 million barrels of crude in 2022.
Bayelsa Times reports that India taking advantage of a Russian offer could come as a huge cost for Nigeria, considering that India has been the top destination for Nigerian oil for the past five years.
Bayelsa Times also reports that in 2021, a total of N1.98 trillion crude oil was sold to India, Spain’s N1.44 trillion, Netherland N863.3 billion.
Canada and the United States of America round out the top five, having spent N422.7 billion and N400 billion, respectively, on Nigerian crude oil.
Remittances to FG continues to decline
Meanwhile, as the Nigerian government thinks of removing petrol subsidy next year, the country’s National Petroleum Company (NNPC) has continued to remit less amount of money to the federation account.
The NNPC remitted the sum of N10.54 billion to the Federation Account Allocation Committee (FAAC) in November 2021 from the proceeds of sales of crude oil and gas in October.
It gave this account during a presentation to FAAC for the month of December 2021.