Private firms in Nigeria will have the chance to import fuel starting from June 2023, as the Nigerian National Petroleum Company Limited (NNPCL) aims to end crude oil swap contracts and turn to cash payments for fuel imports.
Mele Kyari, the Group Chief Executive Officer of NNPCL, said this during an interview with Reuters on June 3. This move is in line with the President’s efforts to reduce the government’s interference in the fuel market and reduce the financial burden on the government.
Reuters quoted Kyari saying:
- “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.
- “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.”
As stated by Reuters, NNPC was still apportioning crude for fuel swaps for July loading, though less than in previous months. In its report detailing March crude oil loadings, NNPC also allocated crude to the swap contracts held by the consortiums.
Earlier, Mele Kyari had told Nigerians that there will be new entrants into the market, following the recent decision to increase fuel pump prices as reported by Nairametrics. He told Arise TV in a recent interview:
- “Investors’ reluctance to come into the market all along was the subsidy regime and that regime does not guarantee repayments back to those who provided the product at subsidized prices. Now that the market regulates itself, oil marketing companies can import products or produce locally. They can take the product into the market, sell it and get their money back.”