A recent report from the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed that in 2021, the Nigerian National Petroleum Company Limited (NNPCL) conducted a swap of crude oil with a value of N2.6 trillion for refined petroleum products.

According to data extracted from NEITI's 2021 Oil and Gas Report, the oil sales receipts during the same year amounted to N2.23 trillion. The report further revealed that the NNPCL, on behalf of the Federation, lifted and exported a total of 24.84 million barrels of crude oil valued at $1.70 billion in 2021. Out of this amount, $1.58 billion was accounted for in respective bank accounts as actual sales receipts for the year, with $1.55 billion pertaining to 2021 sales receipts, and $24.32 million relating to settling prior year receivables.

The report explained that this exchange was conducted under the Direct Sale Direct Purchase (DSDP) program. Under the DSDP initiative, which began in 2016, selected overseas refiners, trading firms, and indigenous companies receive crude supplies in exchange for delivering an equivalent value of petrol and other refined products to the NNPCL.

Additionally, the report noted that the NNPCL did not supply any crude oil to Nigeria's refineries in the reviewed period, primarily due to the non-functionality of these facilities at that time.

NEITI's report stated, "NNPC allocated a total of 98.92 million barrels of crude oil valued at $7.11 billion (N2.73 trillion) for the local market in 2021. However, no crude was delivered to any of the local refineries in 2021. Instead, NNPC used 95.25 per cent of this crude for crude exchange for products at the international market under the DSDP arrangement, while 4.75 per cent was sold at the international market."

Responding to the report, Chief Chinedu Ukadike, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized the need for the federal government to prioritize the refurbishment of the nation's refineries. He argued that revitalizing these facilities would reduce the demand for foreign exchange, which, in turn, would help stabilize the exchange rate. Ukadike also stressed the importance of promoting functional modular refineries within Nigeria to reduce reliance on imported petroleum products.

He stated, "We are going to continue advocating the revamp of our refineries. If our refineries are functioning, the crash of the naira against the dollar would reduce because the demand pressure for dollars by marketers will drop."

Ukadike added, "Similarly, we will not need this DSDP thing because we will be refining our products here in Nigeria, not exchanging our crude with anybody or company overseas."

He further advocated for government support for modular refineries to ensure they become operational and help refine domestic crude oil, reducing the need for imports and subsidies.