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NNPCL terminates crude oil swap deals, adopts cash payments
The Nigerian National Petroleum Company Limited (NNPCL) has disclosed that it has terminated all crude oil swap deals.
The Group Chief Executive Officer (GCEO) of the NNPCL, Mr Mele Kolo Kyari made the disclosure in an interview with Reuters.
According to Kyari, “In the last four months, we practically terminated all DSDP contracts and we now have an arm’s-length process where we can pay cash for the imports.”
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It could be recalled that in 2021, Kyari speaking during a virtual panel at the African Refiners and Distributors Association annual conference held in Abidjan revealed the country’s plan to end the country’s oil-for-fuel swaps system as soon as local refining capacity improves by 2023.
He said with all the government refineries, the Dangote refinery as well as the modular facilities expected to be fully functional latest by 2023, the corporation will end the swap deal, which has been in operation since 2016.
Before now, the NNPCL has been importing gasoline from consortiums of foreign and local trading firms and repaying them with crude oil via what is known as Direct Sale Direct Purchase (DSDP) contracts since 2016 because it does not have enough cash to pay for the purchases, data and trading sources said.
“By importing less gasoline as private companies import the bulk, NNPC will be able to pay for its purchases in cash,” Kyari said in his interview on Saturday.
