Petroleum Products Import: NNPC Saves $2.2bn Through DSDP Scheme

The Nigerian National Petroleum Corporation (NNPC) has said since the launch of the Direct-Sale-Direct-Purchase (DSDP) scheme of petroleum products import, the corporation has been able to save $2.2 billion.

The DSDP scheme introduced in 2016 with efficient and cost-effective systems and processes allow the NNPC to allocate a certain volume of crude oil to successful companies, while the companies are required to inject back the equivalent value of different petroleum products to the country.

The Group Managing Director NNPC, Dr. Maikanti Baru, disclosed the benefit of the scheme on Thursday, at the public opening of bids for the 2019 term-contract for lifting crude oil and petroleum products under the DSDP scheme held in Abuja.

Baru said “The third public bid opening ceremony for the DSDP tenders is fully in line. It is in demonstration of President Muhammadu Buhari’s transparency and anti-corruption initiatives which the NNPC has imbibed and championed relentlessly”.

“Since the inception of the DSDP scheme in 2016 until March 2019, about 29.5million metric tons (39.6 billion liters) of petroleum products have been supplied under the scheme representing over 90 per cent of the national requirement”.

According to the NNPC boss, the scheme has over the year’s ensured a significant reduction in product demurrage cost in the range of 84 per cent and cost savings of about 2.2 billion dollars.

“its competitive pricing framework which is lower than the Petroleum Products Pricing Regulatory Agency’s (PPPRA) benchmark, led to about 84 per cent reduction in products demurrage cost in the range of 84 per cent and cost savings of about $2.2 billion.”

Baru, who noted that the ultimate aim of the scheme was to ensure value optimisation to the federation, further said that 132 (local and international business partners, and potential off-takers and suppliers) companies had bid for the right to swap the nation’s crude oil for fuels as a tender for the deals closed on Thursday.

“Through a transparent competitive bidding and evaluation process, the scheme has enlisted a robust supplier mix comprising of the big international players and strong Nigerian downstream companies for supply flexibility and local capacity development.”