By Emmanuel Addeh
The Nigerian National Petroleum Corporation (NNPC) has extended until June its contracts with private companies to swap crude oil for fuels, Reuters quoted a company spokesman, as saying yesterday.
The latest extension is the second extension of the one-year contracts to exchange more than 300,000 barrels per day (bpd) of crude oil with 15 company pairings, which was originally to expire in October 2020.
“The DSDP was extended till June 2021 to enable us to conclude the ongoing process of putting new contact in place,” NNPC spokesman, Dr. Kennie Obateru, said yesterday.
NNPC issued a tender for new contracts, known as Direct Sale, Direct Purchase (DSDP), in December last year, with the coveted swaps supplying nearly all of Nigeria’s petrol, and some of its diesel and jet fuel, in exchange for cargoes of crude oil.
The federal government said it eliminated pump price caps for petrol last year, but NNPC controls over ex-depot pricing have made it tough for private companies to make money importing the fuel, leaving the government as the sole supplier.
The NNPC had initially contracted about 34 companies under a total of 15 groupings to carry out a swap deal for the supply of refined fuel in exchange of crude oil.
The scheme was introduced in 2016 to replace the programme at that time which gulped trillions of naira in subsidy payments to importers and supplied about 90 per cent of the fuel import requirements.