- A NEITI report has shown that the NNPCL swapped crude oil worth N2.6 trillion for refined petroleum products in 2021.
- None of Nigeria's refineries benefitted from the transaction during this period
- The report established that this could be because Nigerian refineries were not ready at the time
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A recent data from the Nigeria Extractive Industries Transparency Initiative (NEITI) has shown that the Nigerian National Petroleum Company Limited (NNPCL) traded crude oil worth N2.6 trillion for refined petroleum products in 2021.
According to the NEITI's recently issued 2021 Oil and Gas Report, the national oil firm did not ship any crude oil to Nigeria's refineries throughout the period under consideration.
The development comes amid report that the NNPCL signed crude oil contracts with several entities, shunning Dangote and other refineries in Nigeria.
Why NNPCL did not supply oil to domestic refineries
Punch newspaper quoted NEITI as saying the NNPCL may not have supplied oil to domestic refineries at the time because domestic facilities were not in use.
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Notably, refurbishment work is currently being done at the Port Harcourt, Kaduna, and Warri refineries in Nigeria, but they have been idle for years.
According to the NEITI study, the oil company used its Direct Sale Direct Purchase program to exchange crude oil from Nigeria for refined goods. It also revealed that the amount of crude oil sold during the review period was N2.23 trillion.
Selected domestic and international refiners, trading firms, and companies are given access to crude supplies under the DSDP system introduced in 2016.
In return, these parties must produce equivalent petrol and other refined products to the NNPCL.
The NEITI stated in its most recent report that NNPC allotted 98.92 million barrels of crude oil worth $7.11 billion (N2.73 trillion) for the local market in 2021. But in 2021, no crude was delivered to any of the nearby refineries.
“Instead, NNPC used 95.25 percent of this crude for crude exchange for products at the international market under the DSDP arrangement, while 4.75 percent was sold at the international market.
“This may be because 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 the settlement of prior year receivables.”
Anxiety as NNPCL fails to remit $6.9bn to FG amid oil boom, firm swaps $7.1bn worth of crude
Legit.ng earlier reported that the NNPCL could not remit $6.923 billion to the federation account and traded about $7.108 billion worth of crude oil under its Direct Sale Purchase (DSDO) scheme in 2021.
The oil firm also owes $13.591 million in outstanding taxes to the Federal Inland Revenue Service (FIRS).
In comparison, unpaid federation revenue to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) amounts to $8.251 billion as of December 31, 2022.
The Nigerian Extractive Industry Transparency Initiative (NEITI) disclosed this in its 2021 Oil and Gas Report.