Nigeria’s minister of state for Petroleum, Ibe. Kachikwu, has said the Federal Government did not pay any subsidy on petroleum products in January 2016.
Kachikwu who is also the group managing director of the Nigerian National Petroleum Corporation (NNPC) said this when he he appeared before the House of Representatives’ Ad-Hoc Committee set up to investigate the NNPC’s offshore processing and crude swap arrangement for the period from 2010 to date.
According to Vanguard newspaper report, he 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.
Explaining further, he said the DSDP was adopted to replace the Crude Oil Swap initiative and the Offshore Processing Arrangement so as to introduce and entrench transparency in the crude oil for product transaction by the corporation in line with global best practices.
“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,” he said.
He further stated that the DSDP initiative whittled down the influence of the minister in the selection of bid winners as it allowed all the bidders to be assessed transparently, based on their global and national track records of performance before the best companies with the requisite capacities are selected.
The minister also spoke on misgivings by some agencies over the alleged non-transparent nature of past crude-for-products exchange arrangements.
He assured that the reconciliation process was ongoing and that going forward, the ministry would deploy technology to track cargoes and trans-shipment at the reception depots in order to forestall any incidence of round tripping.