After 10 Years, NNPCL Begins Cash Payment for Petrol Import with TotalEnergies, Sahara, Others
- NNPC has stopped crude oil swap as it begins cash payment for petrol imports
- This is part of its plan to improve the financial stability of Nigeria
- By end of October, NNPCL plans to settle outstanding bills for oil exchanges
The Nigerian National Petroleum Company (NNPC) Limited has stopped using crude oil swaps to buy petrol for the first time in almost ten years and has started using cash tenders instead.
The change aligns with President Bola Tinubu's reform plans introduced in May 2023.
The new administration aims to eliminate expensive fuel subsidies and improve the financial stability of Africa's largest oil-exporting country.
Source: Getty Images
This follows an earlier report that NNPCL shunned Dangote Refinery and signed crude oil contracts with several entities.
The National Economic Council explained that the $3 billion emergency loan for crude oil by the Federal Government would be deployed to stabilise the naira.
NNPC to pay up the unpaid invoices for lengthy oil swaps
According to sources cited by Reuters, the state-owned oil corporation made this significant modification in its most recent tender for the purchase of fuel scheduled for delivery in November.
The sources added that the NNPCL intends to clear unpaid invoices for lengthy oil swaps by the end of the month.
The adjustment results from Tinubu's efforts to lessen expensive petrol subsidies as part of broader policies aimed at improving the ailing finances of Africa's largest oil exporter.
Despite higher oil prices, BusinessDay reported that NNPCL made no contributions to the government coffers last year because oil-for-petrol swaps ate up all the crude oil it had to sell.
According to two sources, NNPCL owes merchants up to $3 billion in oil this year, and the debts will be paid in November.
Fuel subsidy measures implemented by Tinubu in May led to a spike in the price of petrol and essentially ended cross-border smuggling.
Although Nigeria produces more oil than any other African nation, it refines little, and its 200 million people are almost dependent on petroleum imports.
In the most recent round of swaps, more than a dozen consortia took part, including international oil traders like Vitol, TotalEnergies, and Mercuri and regional businesses like Sahara.
Despite the reforms, insiders claim that the NNPCL still imports all petrol because of ongoing foreign dollar shortages and a pump price cap that effectively prevents private importers from profitably bringing in fuel.
"We Have Access to FX": NNPC Becomes Sole Importer of Petrol as Forex Shortage Forces Out Marketers
In an earlier report by Legit.ng, the NNPCL announced that it has once again become the only importer of petrol four months after imports were opened to private companies.
It said this was due to the inability of licenced local private firms to get foreign currency.
Source: Legit.ng
