By Moses Patience Chat
The Nigerian National Petroleum Company (NNPC) Limited has ended its crude swap contracts with oil traders and will now begin to pay in cash for all imports of petrol products.
The Group Chief Executive Officer (GCEO) of NNPC Limited, Mallam Mele Kolo Kyari, disclosed this in an interview with journalists, where he also stated that private companies could begin importing petrol as soon as this month.
The move is part of President Bola Tinubu’s plans to deregulate the petroleum products market and reduce the burden on government finances through the removal of fuel Subsidy.
Valuechain findings revealed that the Company has been importing petrol from consortiums of foreign and local trading firms and repaying them with crude oil through a contract known as Direct Sale Direct Purchase (DSDP) since 2016 because it does not have enough cash to pay for the purchases.
Mallam Kyari told journalists during the interview that the firm has practically terminated all DSDP contracts and that “we now have an arms’ length process where we can pay cash for the imports.”
He added that by importing less petrol as private companies import the bulk, NNPC will be able to pay for its purchases in cash.
Kyari maintained that NNPC’s monopoly on petrol supplies was coming to an end as private firms are now allowed to start importing petroleum productd as early as this month.