The Nigerian National Petroleum Corporation (NNPC) has announced that 15 companies had won the bids for its 2019/2020 Direct Sale and Direct Purchase (DSDP) arrangement. Under the swap-type scheme, the selected firms will offtake crude oil and will in return deliver corresponding petroleum products of equivalent value to the NNPC.
The national company is targeting about 14 billion litres of products supplies from the 2019/2020 DSDP. The contract is for one-year effective from 1 October 2019 to 30 September 2020. About 132 companies bid for the deals. The 15 selected enterprises include energy traders Gunvor, Vitol and Trafigura, oil majors BP and Total, as well as local downstream companies.
Nigeria is almost entirely reliant on imported petroleum products because of years of neglect at its own refineries. The country has leaned heavily on barter deals to get fuel, particularly gasoline, as other importers struggle due to price caps. According to the NNPC, since the procedure was created in 2016, replacing a program that paid subsidies to importers, the DSDP scheme had saved the Government US$2.2bn and supplied some 90%t of Nigeria’s import requirements.