Nigeria’s state oil company, NNPC, has initiated a change in its gasoline procurement strategy, moving from oil swaps to cash tenders for the first time in nearly a decade, according to four undisclosed sources.
The move coincides with President Bola Tinubu’s efforts to eliminate costly fuel subsidies as part of comprehensive reforms designed to strengthen the nation’s finances, according to Reuters.
Although positive, this shift raises questions about its sustainability. NNPC plans to settle outstanding debts owed under long-running oil swaps by the end of the following month, a debt totalling up to $3 billion.
The reforms have tripled petrol prices and curbed cross-border smuggling but NNPC remains the primary gasoline importer due to foreign exchange constraints and price caps that hinder private importers. As Africa’s largest oil exporter, Nigeria relies heavily on fuel imports, despite being a major oil producer.