We paid zero subsidy in January 2016-FG

Following the commencement of the new price regime for petroleum products, the federal government yesterday disclosed that it did not pay any subsidy on products in January 2016, despite having paid about N1.1 trillion in 2015.

The Minister of State for Petroleum and Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe. Kachikwu revealed this when he appeared before the House of Representatives Committee investigating the offshore processing agreements (OPAs) and crude oil swaps between NNPC, its subsidiary, the Petroleum and Pipelines Marketing Company, and oil traders.

He added that the development was a step towards revamping the oil sector.

The minister gave non-committal responses to some questions been asked by the House of Representatives Committee,  but he responded to the Committee query on  the offshore processing agreements (OPAs) and crude oil swap between NNPC, its subsidiary, the Petroleum and Pipelines Marketing Company, and oil traders.

Dr. Ibe. Kachikwu:

“When I assumed duty as the GMD of NNPC, I met the Offshore Processing Arrangement (OPA) and like you know there is always room for improvement. I and my team came up with the DSDP initiative with the aim of throwing open the bid process.

“This initiative has brought transparency into the crude-for-product exchange matrix and it is in tandem with global best practices,” the statement quoted Kachikwu to have said.

He said the DSDP aims to reduce the gaps that were obvious in the OPAs and the losses the NNPC incurred from it.

According to him, the DSDP would help NNPC grow indigenous capacity in the international crude oil business, as well as generate employment opportunities for indigenous companies that would be selected.

He also said the initiative gives other government agencies such as the Bureau of Public Procurement (BPP) and Nigeria Extractive Industry and Transparency Initiative (NEITI) the opportunity to be a part of the bid process for transparency.