ABUJA—THE Minister of State for Petroleum/Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Ibe. Kachikwu, yesterday said the Federal Government did not pay any subsidy on petroleum products in January 2016.

He also 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.

Kachikwu stated these when 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.

He explained that 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.

The Direct Sale-Direct-Purchase alternative allows for the direct sale of crude oil by NNPC as well as direct purchase of petroleum products from credible international refineries.

Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.

Kachikwu stated that the DSDP option eliminated all the cost elements of middlemen and gave the NNPC the latitude to take control of sale and purchase of crude oil transaction with its partners, adding that the initiative would save one billion dollars for the Federal Government.

He said: “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 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.

Need for introduction of DSDP

Commenting on the need for the introduction of the DSDP, Kachikwu maintained that the policy was aimed at reducing the gaps inherent in the OPA and the losses incurred by the NNPC in the past.

He stated that the new arrangement would help the NNPC grow indigenous capacity in the international crude oil business and generate employment opportunities for indigenous companies that were selected.

He added that the DSDP initiative gave other government agencies, such as the Bureau of Public Procurement (BPP) and Nigeria Extractive Industry and Transparency Initiative (NEITI) the opportunity to be part of the bidding process in order to engender adherence to due process.

Misgivings by some agencies

Speaking on some of the reported misgivings by some federal agencies over the alleged non-transparent nature of past crude-for-products exchange arrangements, Kachikwu 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.

The NNPC had in November, said it had discontinued the Offshore Processing Arrangement, OPA, and had replaced it with Direct Sale-Direct-Purchase (DSDP) programme.

The NNPC had also stated that the replacement of the OPA with the more efficient DSDP was aimed at enshrining transparency and eliminating the activities of middlemen in the crude oil exchange for product matrix.

To this end, the NNPC withdrew the call for commercial bids issued to 44 bidders, made up of 34 international firms and 10 indigenous companies, earlier shortlisted.

http://www.vanguardngr.com/2016/02/no-subsidy-paid-in-january-kachikwu/

yes we know that now it is profit making........

Tell me more

Nigeria this is another year pls change for the better

good news

Mrfahaz:
yes we know that now it is profit making........

Read and comment

Price will rise again and hardship will come with it

Subsidy was still paid. Since the naira is sold at a subsidised rate of 197 for the import of petrol, a subsidy still exist. Were the naira allowed to find its true value which is around 230, the price will shoot up to around N100 per litre.

Buhari has still refused to deregulate the price of kerosene and petrol despite super strong reasons to do so. Instead he is still fixing prices, playing to the gallery.

If the price of oil should shoot up today, there will be need to increase the price and there will be stiff resistance

Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.

Jonathan da pdp , Allah ya'isa! Thieves kowai.

Mrfahaz:
yes we know that now it is profit making........

all dis teamftc pple sev

grandstar:
Subsidy was still paid. Since the naira is sold at a subsidised rate of 197 for the import of petrol, a subsidy still exist. Were the naira allowed to find its true value which is around 230, the price will shoot up to around N100 per litre.

Buhari has still refused to deregulate the price of kerosene and diesel despite super strong reasons to do so. Instead he is still fixing prices, playing to the gallery.

If the price of oil should shoot up today, there will be need to increase the price and there will be stiff resistance

Actually, exchange rate is N197 to a Dollar. There is no subsidy there sir.

Excellento

grandstar:
Subsidy was still paid. Since the naira is sold at a subsidised rate of 197 for the import of petrol, a subsidy still exist. Were the naira allowed to find its true value which is around 230, the price will shoot up to around N100 per litre.

Buhari has still refused to deregulate the price of kerosene and diesel despite super strong reasons to do so. Instead he is still fixing prices, playing to the gallery.

If the price of oil should shoot up today, there will be need to increase the price and there will be stiff resistance

Subsidy was not paid. The price of crude per barrel is very low, so also the landing cost of Petrol. I believe what we have is negative subsidy.

Mynd44:

Actually, exchange rate is N197 to a Dollar. There is no subsidy there sir.

There is no subsidy and yet the government can't meet demand for forex! Its incomprehensible

The biggest symptom of its inability to meet demand is the 306 at the back market.

Buhari extremely poor understanding of economics will leave the economy in tatters.

The naira will hit 400 if this expansionary budget is passed

Okay...

grandstar:


There is no subsidy and government can't meet demand for forex.

The biggest symptom of its inability to meet demand is the 306 at the back market.

Buhari extremely poor understanding of economics will leave the economy in tatters.

The naira will hit 400 if this expansionary budget is passed

Let the Naira hit 400. Perhaps it will knock some senses into our heads and we will cut down our silly importations and start looking inwards in terms of local production when the price it takes to import will become a lot higher than the price it takes to produce it here

We are hoping for the best this year, I believe we will definitely get it right!

Check my signature for more details on how to loose body fats

Story Story!!aha make Una clap 4 Una self...APC I like it more when u guys lie to Nigerians

You want to subsidise 28dollar per barrel fuel before abi

good

k

Don't know whether to be happy or not

H

........and scarcity no dey? May God bless PMB for us

Watch out for part 2

APC is working
Baba Buhari is working
Our refineries are working
We are fighting corruption
APC States are commissioning new projects

God bless the FRON

does this mean we could buy fuel at normal rate without subsidy?

[b][/b]“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.”

Will there ever be transparency

No problem, whether you guys like pay or not.
We as a patriotic citizen are only concerned with a responsible govt, cos am beginning to doubt you guys if you will make this nation proud of voting you in.

Mynd44:

Let the Naira hit 400. Perhaps it will knock some senses into our heads and we will cut down our silly importations and start looking inwards in terms of local production when the price it takes to import will become a lot higher than the price it takes to produce it here

400 to 1 is simply 1 step forward, 10 steps backwards.

52% of raw materials used by manufacturers are imported. So it will shoot up their cost snd many of these inputs have no local substitutes.

Also world class machinery which will make the manufacturers very competitive has to be imported.

Imports any way has never been the country' s problem. The primary problem iss that Nigeria does not export