NNPC has lowered official prices of crude oil by $1 per barrel for 20 out of 26 oil grades. This is in an effort to regain share of the global oil market amid drop in supply and growing competition.

The NNPC cut the selling price of Qua Iboe for November to a 17 cent premium to the benchmark Dated Brent, from $1.07. It also reduced the price of Bonny Light to a 7 cent premium and Forcados to a 41 cent discount to Dated Brent.

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Like every other producer country, Nigeria is grappling with prices that are less than half of what they were in July 2014. Also, the upsurge in militant attacks has worsened the revenue woes plaguing the country. Export flows have fallen to the lowest in at least nine years earlier this year.

NNPC Says Reduction Will Boost Market Share

The Group General Manager for the oil-marketing division of the NNPC, Mele Kyari, said that the price reductions were due to a “huge cargo overhang” as the country attempts to regain market share.

He said five companies that market Nigeria’s crude have raised the issue of high official selling prices. However, he said the pricing decisions were unrelated to those “complaints.”

The changes to November prices have brought them back to accurate market levels. Brent crude futures slumped as much as 2.7 per cent to $51.27 a barrel, the largest intraday decline since September 27

Lower prices are seen as a sign that Nigeria is seeking to become more competitive in an already oversupplied global market. Shipments are also gradually resuming.

The reductions take place as the Organisation of Petroleum Exporting Countries, of which Nigeria is a member, attempts to cut its combined output to 32.5 million to 33 million barrels per day in an effort to steady oil markets.

The world’s largest crude exporter, Saudi Arabia had cut the prices for November oil sales to Asia and Northwest Europe, and for most grades to other regions some weeks back. State-owned Saudi Arabian Oil Company, Saudi Aramco, had lowered its official pricing for Arab Light crude to Asia by 25 cents a barrel to 45 cents less than the regional benchmark.