The minister of state for petroleum resources, Ibe Kachikwu, has revealed that the federal government would end crude swap in March.
According to the Minister, the nation would save $1 billion from the Direct-Sale–Direct-Purchase (DSDP) arrangement which will replace the crude-for-refined products exchange arrangement popularly referred to as crude swap.
Kachikwu also disclosed that the price modulation policy had rid the federal government of the burden of subsidy on imported petroleum products in January 2016.
The NNPC GMD made these disclosures on Tuesday, February 2, when he appeared before the House of Representatives Ad-Hoc Committee set up to investigate the Corporation’s offshore processing and crude swap arrangement for the period between 2010 to date at the National Assembly.
He explained that the DSDP was adopted to replace the Crude Oil Swap initiative and the Offshore Processing Arrangement so as to introduce and entrench transparency in the crude oil for product transaction by the Corporation in line with global best practices.
Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.
But Kachikwu, in a statement issued yesterday by the NNPC spokesman, Ohi Alegbe, noted that the DSDP option eliminates all the cost elements of middlemen and gives the NNPC the latitude to take control of sale and purchase of the crude oil transaction with its partners, adding that the initiative would save $1 billion for the federal government.
