Following the removal of petrol subsidy in Nigeria, the Nigerian National Petroleum Company Limited (NNPC) is taking steps to discontinue crude oil swap arrangements and shift towards cash payments for petrol imports.
As a result, the company is winding down crude oil swap contracts with traders and will now pay cash for petrol imports. Private companies are also expected to start importing petrol in the near future, according to Reuters.
This move indicates the NNPC’s intention to end crude swap contracts and replace them with cash payments for petrol imports.
Instead of exchanging crude oil for refined petroleum products, the state-owned oil company will adopt a cash payment system.
The decision aligns with President Bola Tinubu’s plan to deregulate the petrol market and alleviate the financial burden on the government, as stated in an official announcement.
President Bola Tinubu’s recent pronouncement during his inauguration that “subsidy is gone” created uncertainty in the market, leading to some fuel station closures and long queues at petrol stations nationwide.
The transition away from crude swap arrangements is part of the broader strategy to reform the petrol market in Nigeria and promote more efficient and sustainable practices.