With respect to the new price regime for petroleum products, the Federal Government of Nigeria has on Tuesday, February 2, announced that it did not pay any subsidy on petroleum products in January 2016.
Despite paying over N1.1 trillion in 2015, the Minister of State for Petroleum/Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Ibe. Kachikwu, stated that the country would save $1 billion (N200 billion) from the newly introduced Direct-Sale-Direct-Purchase, DSDP, arrangement in Nigeria’s crude oil for products transaction which is to commence next month.
Kachikwu made the disclosure known when he appeared before the House of Representatives Committee investigating the offshore processing agreements (OPAs) and crude oil swaps between NNPC, its subsidiary, the Petroleum and Pipelines Marketing Company, and oil traders.
He said: “When I assumed duty as the Group Managing Director of NNPC, I met the Offshore Processing Arrangement (OPA) and like you know, there is always room for improvement.
“I and my team came up with the DSDP initiative with the aim of throwing open the bidding process. This initiative has brought transparency into the crude-for-product exchange matrix and it is in tandem with global best practices.”
Kachikwu added that the development was a step towards revamping the oil sector.