NNPC swaps N2.6tn crude for refined products

The Nigerian National Petroleum Company Limited (NNPC) exchanged crude oil valued at N2.6tn for refined petroleum products in 2021, latest data from the Nigeria Extractive Industries Transparency Initiative, an agency of the Federal Government, showed.

An analysis of crude oil production figures obtained from the just released 2021 Oil and Gas Report of NEITI also indicated that the national oil company did not send any crude oil to Nigeria’s refineries during the period under review.

NEITI, however, stated that the non-supply of crude to domestic refineries by NNPCL could be due to the fact that the facilities were not operational at the time.

Nigeria’s refineries in Port Harcourt, Kaduna and Warri have been dormant for years, though rehabilitation is ongoing at the facilities currently.

The NEITI report stated that the oil firm exchanged Nigeria’s crude oil for refined products under its Direct Sale Direct Purchase programme, adding that crude oil sales receipt during the review period was N2.23tn.

Under the DSDP scheme, initiated in 2016, selected overseas refiners, trading companies and indigenous companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products to the NNPCL.

Commenting on this in its latest report, NEITI said, “NNPC allocated a total of 98.92 million barrels of crude oil valued at $7.11bn (N2.73tn) for the local market in 2021. However, no crude was delivered to any of the local refineries in 2021.

“Instead, NNPC used 95.25 per cent of this crude for crude exchange for products at the international market under the DSDP arrangement, while 4.75 per cent was sold at the international market.

Also Read: WORLD BANK TO GRANT NIGERIAN GOVT FRESH $700M LOAN

“This may be due to the fact that none of the refineries were operational in 2021. The sum of N2.23tn ($5.85bn) was the actual domestic crude sales receipts in 2021, out of which the sum of N1.64tn ($4.30bn) represents 2021 sales receipts, while the sum of N588.68bn ($1.55bn) relates to settlement of prior year receivables.”