The Nigerian National Petroleum Company Limited (NNPC), has disclosed the ending of its fuel importation monopoly.
In an interview with Reuters, where this development was disclosed, Mele Kyari, the group chief executive officer of NNPC, also stated that the state-owned oil corporation was winding down crude oil swap contracts with traders and will pay cash for petrol imports as private companies could begin importing petrol as soon as this month.
“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,” Kyari was quoted as saying.
“This is the first time NNPC has said it is terminating crude swap contracts. By importing less gasoline as private companies import the bulk, NNPC will be able to pay for its purchases in cash.”
BizWatch Nigeria understands that NNPC has been importing petrol 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, the statement said.
Nigeria is Africa’s biggest crude producer but imports most of its refined products after running down its refineries. Nigeria’s petrol import bill hit N5.2 trillion in 2022, the highest in six years, as the quest by the country to wean itself off imported fuel drags.
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