Nigeria: NNPC Modifies Crude Swap Scheme
The Nigerian National Petroleum Corporation (NNPC) has disclosed that it adjusted its crude oil-for-product swap scheme known now as Direct Sale-Direct Purchase (DSDP), to include not just oil volume allocated for domestic consumption, but also from the volume accruing to the Federal Inland Revenue Services (FIRS)-Petroleum Profit Tax (PPT).
The NNPC equally noted that under-recoveries or subsidy accumulating from its supply of petrol below the market price were charged to the federation account in the case of the domestically inclined DSDP and the National Fuel Support Fund (NFSF) in the case of the extended DSDP.
The corporation uses the DSDP programme to supply petrol and keep its pump price at the government regulated price of N145 per litre.
A note obtained from the October 2019 edition of the corporation’s financial and operations report disclosed this information.
It explained that: “DSDP has been adjusted to include daily crude allocation from federation (domestic), FIRS-PPT crude and extended DSDP. This is reported retrospectively from July 2018.
“Under recovery for DSDP (domestic) is charged to the federation account. Under recovery for flush volumes and extended DSDP is charged to the National Fuel Support Fund (NFSF).”
In October 2018, the NNPC had disclosed that it has a $1.05 billion worth National Fuel Support Fund which it set up to ensure stability in the petroleum products supply.
It had made the disclosure in the light of an accusation by the National Assembly that it had a $3.5 billion fund saved to secretly subsidise importation of petrol.
From its October report, the corporation indicated that Nigeria lifted crude oil in the categories of FIRS-Production Sharing Contract (PSC), Department of Petroleum Resources-PSC, federation export and domestic crude allocation.
The total volume for the lifting between October 2018 and October 2019, according to the corporation were 3,330,334,274; 749,169,328; 4,144,098,171 and 7,653,977,583 barrels.
It explained that: “In October 2019, 1,631.86 million litres of PMS were supplied into the country through the DSDP arrangement as against the 1,926.81million litres of PMS supplied in the month of September 2019.”
Similarly, between October 2018 and October 2019, it noted that 18,347,625,969.72 litres of petrol were supplied into the country through domestic DSDP and 4,374,822,670.72 litres through the extended DSDP
In context, it stated that: “In September 2019, NNPC lifted 10,665,632 barrels of crude oil from the daily allocation for domestic utilisation translating to an average volume of 355,521 barrels of oil per day in terms of performance.
“In order to meet domestic product supply requirement for the month of September 2019 the 10,665,632 barrels in its entirety were processed under the Direct-Sales-Direct Purchase (DSDP) scheme while no deliveries to the domestic refineries for processing.”
Source: This Day