Mele Kyari, group general manager (GGM) of crude oil marketing division of the Nigerian National Petroleum Corporation (NNPC), says Boko Haram insurgency no longer affects crude oil sales in Nigeria.
Kyari, who spoke at the crude oil term contract bid opening at the NNPC Towers in Abuja, said Boko Haram may kill 100 people and nothing would happen to sales.
“The traditional things that normally impact on supply and demand balance, like political crises, no longer have impact on buying and selling of crude oil,” he said.
“In the past, if you have some crises, probably Boko Haram attacks, some place and then crude oil price goes up. Today, 100 people would die, a terminus may be bombed and nothing happens.
“The market no longer responds to such socio-political issues that we know of. And of course today, we know that there (are) unstable oil prices and probably this is the most turbulent pricing period that we’ve had.
“Within two to three days, we have changes that you can’t explain. It can go up two dollars and come down two dollars, that’s unusual for this business.”
He added that the result of all these have meant that the NNPC, since August 2014, has had cargoes of oil hanging, which means selling to customers who could not find a landing for it.
This makes it difficult for the buyer to pay the government, having bought it with a letter of credit. In turn, it reduces the value of the crude and the NNPC then gets less than expected.
He also said this contributes to the low crude oil prices experienced around the world, saying NNPC would do what it can to solve the problem of crude oil hanging.