MON, JUNE 05 2023-theGBJournal |NNPC Limited Group Chief Executive officer, Mele Kyari told Reuters Sunday the state oil company is winding down its crude swap contracts with traders and will pay cash for petrol imports.
This is coming days after President Bola Ahmed Tinubu announced the discontinuation of fuel subsidy, part of his administration’s plans to totally deregulate the petroleum sector.
In 2019, NNPC contracted about 34 companies under a total of 15 groupings to carry out a swap deal to supply refined fuel including petrol diesel and jet fuel in exchange for crude oil. The programme was introduced in 2016.
Meanwhile, the NNPC, currently on a nationwide campaign to sensitize the public on the fuel subsidy removal, said it will no longer be sole the supplier of petrol going forward.
It noted that by law, no player can control more than 30% of the market.
”Prices will be determined by market forces, and like other companies, NNPC determines its petrol price as the market dictates. Prices will be determined by market forces. It could also go down,” Kyari said.
While in full support of the fuel subsidy removal, the NNPC noted that delaying the removal till the end of June 2023 could have caused serious nationwide fuel scarcity and hardship as NNPC Ltd was owed over N2.8 trillion and can no longer sustain sufficient supply to the market.
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