Lagos — The Nigerian National Petroleum Corporation (NNPC) has extended for six months its contracts with private companies to swap crude oil for fuels, two sources familiar with the contracts told Reuters.
The initial one-year contracts to exchange more than 300,000 barrels per day (bpd) with 15 company pairings were due to expire in October.
Analysts have said Nigeria will continue swapping crude for fuel for at least three more years because its refineries are still not fully operational.
Recall that NNPC Managing Director, Mele Kyari in a media interview last year said the last round of the swap program in July 2019, known as Direct Sale, Direct Purchase, or DSDP, will run until September 2020 and then be extended.
The sources at NNPC said the companies renegotiated the price agreement due to changes to fuel prices in Nigeria.
The contracts supply a large portion of Nigeria's gasoline, and some of its diesel and jet fuel, as it has not been profitable for private importers to bring in fuel.
Nigeria recently stopped setting a petrol price cap at the pump, a decision it says will eliminate costly subsidies and enable the private sector to begin importing again.