The Nigerian National Petroleum Company (NNPC) Limited disclosed at the weekend that it has commenced termination of crude oil swap contracts and will pay cash for petrol imports.
According to NNPC’s Group Chief Executive Officer (GCEO), Mele Kyari, private companies would begin importing petrol in June.
Kyari who said the national oil company will now pay for its purchases in cash by terminating the crude swap contracts, added that less petrol will be imported by NNPC while private companies will import the bulk.
In the last four months, we practically terminated all Direct Sale Direct Purchase (DSDP) contracts. And we now have an arm’s-length process where we can pay cash for the imports,” Kyari told Reuters.
Information Nigeria reports that DSDP is an agreement that allows sales of crude oil to refiners, who will in turn supply NNPC with an equivalent worth of petroleum products.
Meanwhile, the House of Representatives on Thursday, asked the Federal Government to suspend all DSDP contracts sequel to the removal of the petrol subsidy by President Bola Ahmed Tinubu’s administration.
The GCEO however noted it is the first time NNPC has said it is terminating crude swap contracts.
Speaking on the country’s production capacity, the of 1.742 million bpd.
However, Nigeria’s oil production fell below the one million mark in April 2023, as output tumbled to 998,602 bpd.
The figure was a 21.26 percent decline compared to March, when output was 1,268,202 bpd.
It was also the lowest volume of production in the last seven months.