The Nigerian National Petroleum Company (NNPC) Limited says it has commenced the termination of crude oil swap contracts and will pay cash for petrol imports, according to Reuters report.
Mele Kyari, NNPC’s group chief executive officer (GCEO), who confirmed the development, told the publication that private companies could begin importing petrol in June.
According to him, NNPC will now pay for its purchases in cash by terminating the crude swap contracts, adding 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 on Saturday.
The 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.
On Thursday, the house of representatives asked the federal government to suspend all DSDP contracts sequel to the removal of the petrol subsidy by President Bola Ahmed Tinubu’s administration.
According to the report, Kyari said this is the first time NNPC has said it is terminating crude swap contracts, emphasising that by importing less petrol as private companies import the bulk, NNPC would be able to pay for its purchases in cash.
Speaking on the country’s production capacity, the NNPC boss said Nigeria’s total crude oil output was 1.56 million barrels per day (bpd) as of Friday.
Petrol prices soar in Benin Republic after subsidy removal in Nigeria
Meanwhile, Petrol prices have almost doubled across fuel stations in Benin Republic after it was announced that subsidy would be removed in Nigeria, according to BBC is report.
Petrol from Nigeria is regularly smuggled into neighboring countries including Cameroon, Ghana, Benin Republic and as far as Sudan.
The BBC report quoted sources to have said the product is being sold for 700 CFA or 800 CFA in Benin Republic — up from a previous price of 450 CFA.
Smuggled petrol — popularly called kpayo – which means “unoriginal” in Goun, a native language – is cheaper than fuelling up at stations, according to local media reports.
President Bola Tinubu, last Monday in his inaugural speech announced the removal of the petrol subsidy regime.
The Nigeria Labour Congres (NLC) subsequently, issued a five-day ultimatum to the federal government to revert to the old price of petrol or face a nationwide protest.
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