The crude-for-fuel swap deal will continue because the refineries are not functional, the Nigerian National Petroleum Corporation (NNPC), explained on Monday.
Group Managing Director (GMD) Mele Kyari, said the deal will persist until the refineries are fixed in 2023.
The latest round of the swap deal, known as Direct Sale, Direct Purchase (DSDP), will run until September next year and then be extended.
Kyari said: “The DSDP is a child of necessity and not a permanent arrangement. So anytime we are able to meet our domestic petroleum products requirement, of course DSDP goes away.
“The DSDP is a child of necessity and not a permanent arrangement. So, anytime we are able to meet our domestic petroleum products requirement, of course DSDP goes away.”
Nigeria has been struggling to become self-reliant in petroleum products, especially in as gasoline and diesel for years because the refineries have been working below the installed capacities.
The development has put a strain on foreign currency reserves because the government went into the crude-for—fuel deal to sustain supplies and meet demand.
Last month, the NNPC announced Vitol SA, Litasco SA and Sahara Energy Ltd among others as the companies shortlisted to exchange crude for gasoline.
The latest round of the DSDP will start next month. Four plants, run by the NNPC operate far below their combined 445,000 barrel per day day potential, forcing the country to import more than 90 per cent of local fuel requirements.
The NNPC began the swap deal more than six years ago as a stop-gap to curb petrol shortages as it tried to revamp the refineries.
The measure will now continue until 2022-23, Kyari said. For this year’s programme, NNPC is looking for 14 billion litres (or 14 cargoes monthly).
Kyari said a new target to revamp the refineries has now been set for 2023, starting with the 210,000 bpd capacity plant in Port Harcourt.
A preliminary check by Maire Tecnimont SpA on the plant, due to be completed next month, will give the estimated cost of fixing it, he said.
A similar check will also be done on the Warri and Kaduna refineries before repairs, the NNPC chief said.
Kyari said: “What we are doing is to see how can we get our refineries back on course and how do we support others to increase local refining capacity.
“Ultimately, by 2023 we should be a net exporter of petroleum products, assuming we’re able to get Dangote refinery at full capacity and we’re able to fix our refineries.”