The Nigerian National Petroleum Company Limited (NNPCL) will henceforth spend about N843 billion on monthly petrol importations.
This follows the cancellation of all oil swaps as part of President Bola Tinubu’s reforms in the petroleum downstream sector to eradicate the expensive petrol subsidy.
Reuters News Agency reports that NNPCL had begun terminating oil swap contracts, implying cash payment for petrol imports.
“In the last four months, we practically terminated all Direct Sale Direct Purchase contracts. And we now have an arm’s-length process where we can pay cash for the imports,” the Group Chief Executive Officer, NNPCL, Mele Kyari, had said.
NNPCL is currently the only petrol importer in Nigeria and recently began buying petrol with cash tenders rather than oil swaps.
According to a report by Punch, with petrol consumption averaging about 48.43 million litres daily and the average ex-depot price of N580/litre, NNPCL would spend about N28.1 billion on petrol imports.
With this, the national oil company will spend about N843 billion importing petrol in 30 days, given that it now pays cash for petrol imports.
According to the report by Reuters, NNPC’s latest tender to purchase petrol in November closed last week, while it noted the company owes $3 billion in oil swap deals which it hopes to pay under the oil swaps deal by the end of November.
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