The previous oil swap arrangement, known as the direct sale, direct purchase (DSDP), had been in place for nearly a decade.
Under the DSDP, crude oil is sold to refiners, who, in return, provide nnpc with an equivalent value of petroleum products.
Sources have disclosed that NNPC’s latest tender for purchasing petrol to be delivered in November was recently concluded.
According to reports, two of these sources indicated that NNPC plans to settle the last debts associated with the oil swap arrangements by the end of the next month.
This transition comes after President Bola Tinubu initiated reforms to eliminate the costly petrol subsidy over four months ago.
On June 4, 2023, NNPC Limited announced the commencement of the termination of crude oil swap contracts and the shift toward cash payments for petrol imports.
“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,” stated Mele Kyari, NNPC Group Chief Executive Officer.
The country reportedly owes approximately $3 billion to trading houses and oil majors as part of the crude oil swap arrangements.