On 1st November 2018, the Nigerian National Petroleum Corporation (“NNPC”) announced it has signed a six-month Direct Sale-Direct Purchase (“DSDP”) Agreement with British Petroleum’s trading arm BP Oil International Limited, for the supply of petrol.
Introduced in 2016, the DSDP arrangement is premised on the NNPC’s powers under the NNPC Act to engage in all commercial activities relating to petroleum operations and is a model whereby NNPC engages qualified and credible companies in the direct sale of crude oil and direct purchase of petroleum products to ensure sustainable product supply. Under this arrangement, the NNPC provides monthly crude oil lifting to such qualified companies and in return, the said companies deliver and supply Nigerian standard specification of petroleum products at designated safe ports in Nigeria equivalent in value to the crude oil received from NNPC.
NNPC has DSDP agreements, with ten (10) consortiums that include trading houses such as Vitol, Trafigura, Mercuria and oil major Total.
This latest agreement will represent twenty percent (20%) of NNPC’s total petrol supply under the DSDP arrangement.
Speaking shortly after a brief signing ceremony at the NNPC Towers, the Group Managing Director of the NNPC, Dr. Maikanti Baru, said as the nation’s products supplier of last resort, NNPC was committed to products availability by inviting new and old players to play in the Nigerian oil sector.
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