The Nigerian National Petroleum Corporation (NNPC) has decided to end its oil swap contracts and shift to cash payments for petrol imports. This move comes as the NNPC tries to combat corruption and inefficiencies in the fuel distribution system.
In the past, the NNPC had been accused of using swap contracts to channel crude oil to middlemen, who in turn provided refined fuel products to Nigeria. However, the process was marred by corruption, opaque pricing mechanisms, and a lack of transparency.
Now, the NNPC is moving towards a cash payment system where it will directly purchase refined products from traders. The aim is to make the fuel importation process more efficient, transparent, and cost-effective.
According to NNPC Group Managing Director Mele Kyari, the new system will allow the corporation to take control of its crude oil allocation and ensure that it gets the best possible deal when purchasing refined products. The government hopes that this will reduce petrol prices and effectively tackle the country's fuel supply challenges.
However, it remains to be seen how this new system will work in practice and whether it will address the deep-rooted issues that have plagued the Nigerian fuel distribution system for years.