The decision by the management of the Nigerian National Petroleum Company Limited (NNPCL) to terminate the controversial crude oil swap contracts and opt to pay for its allocations in cash has received commendation from a civic society group, Policy Alert.
The group quoted the Group Chief Executive Officer (GCEO) of NNPCL, Mele Kyari, as announcing recently that the company commenced the termination of crude oil swap deals and would now pay for its crude allocations for local refining in cash.
Policy Alert is a civil society organisation working to promote economic and ecological justice in Nigeria.
Participants in a public conversation on the theme, “Beneficial Ownership and Nigeria’s crude swaps – priorities for the new administration,” applauded NNPCL for the decision, as it would result in less volume of petrol being imported by the company, while private companies would have the opportunity to join in the importation of the bulk of the petroleum products.
Kyari had said that in line with the Federal Competition & Consumer Protection Commission (FCCPC) requirements, the NNPCL would henceforth not account for more than average of between 30 and 40 percent of the total volume of petroleum products imports into the country to create room for the participation in the process by other players in the sector.
However, Policy Alert said participants in à Twitter Spaces conversation on Tuesday noted that while the decision by the NNPCL to end crude oil swap deals was commendable, it would only amount to half-measures if the allegations of corruption and inefficiency in the system underpinning the contracts were not comprehensively investigated, lost revenue recovered, culprits punished, and safeguards instituted.
“It would be counter-productive to allow politically exposed persons (PEPs) who were allegedly involved in corrupting the present regime to continue presiding over fresh transactions under the new administration” Policy Alert noted in a communique issued after the conversation.
“Participants applauded the NNPCL over the decision to end the crude oil swap deals. This is long overdue and would plug the massive revenue leakages suffered by the Nigerian state over the years due to under-delivery, unpaid tax liabilities, importation of dirty fuels, and other violations by oil traders.
“The crude swap deals, whether in its previous forms as the Refined-Product Exchange Agreement (RPEA) and Offshore Processing Agreement (OPA), or in its most recent form as Direct-Sales Direct-Purchase (DSDP) arrangement, have been poorly regulated, opaque, and prone to corruption resulting in billions of dollars in losses to government,” the groups said in the communique.
“Ending the swap deals is not enough. This should be followed by a thorough investigation of all the swap deals up to now to expose and bring to book those who facilitated or benefited from the corruption-prone regimes.
“The NNPCL owes it to the Nigerian public to publish the traded volumes, payments received by the government and status of outstanding liabilities owed the federation from its oil-for-product swap deals with oil and gas commodity trading companies, particularly between 2010 till date.
“The company must ensure that, going forward, transparent criteria are set for selecting the private importers to avoid a repeat of past mistakes. This must include the disclosure of beneficial owners of the contracted firms,” the group added.
Urging the Tinubu administration to leverage on the recently launched register of Persons with Significant Control as an inter-agency tool to pass a strong signal to those who have been ripping off the country’s oil resources, Policy Alert said this would send a strong signal that it was no longer business as usual.
