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DSDP scheme has saved us $2.2bn —NNPC

DSDP scheme has saved us $2.2bn —NNPC

The Nigerian National Petroleum Corporation (NNPC) has revealed that the introduction of Direct Sales Direct Purchase scheme has helped it to save the sum of $2.2 billion within a short time.

Under the DSDP scheme, NNPC allocates crude oil to successful companies that are required to bring them into the country.

The Group Managing Director of the NNPC, Dr Maikanti Baru, while speaking on Thursday at the 2019/2020 DSDP bid opening ceremony in Abuja, explained that NNPC will be entering into an agreement that will involve about 14 billion litres of petroleum products per annum with successful companies.

He maintained further that the DSDP scheme has recorded a robust supplier mix through a transparent competitive bidding and evaluation process.

“The scheme prides itself with a competitive pricing framework, that is lower than the Petroleum Products Pricing Regulatory Agency (PPPRA) benchmark, which over the years has ensured significant reduction in product demurrage cost in the range of 84 per cent and cost savings of about $2.2 billion”, Baru said.

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Speaking further, he said that 132 bids had been received for the 2019/2020 programme, adding that DSDP is aimed at maximizing Nigeria’s crude oil for the benefit of all Nigerians.

He also specified the loopholes recorded in previous Offshore Processing Arrangement deals will not be tolerated again, adding that only credible, tested and compliant offtake would be engaged for the scheme, as well as strong Nigerian downstream companies to ensure a steady supply of petroleum products and also develop their capacity.

In his speech, the Group General Manager, Crude Oil Marketing Division of the NNPC, Mallam Mele Kyari, said the major purpose was to end corruption, adding that opaqueness must be eliminated to end corruption.

“We are trying to ensure that out processes are open to all the DSDP is an intervention 6to ensure unfettered supply of petroleum products”, he said.

While citing that the scheme would ensure optimal value for Nigeria’s crude oil, he noted that each of the partners must be able to demonstrate financial capacity to a minimum of $72 million as well as cognate experience in crude oil marketing and petroleum products import.

He also made it known that NNPC, “would do its best efforts to conduct its own internal estimates, setting up minimum price levels. This is not the highest or lowest bidder tender, because we know some prices are not realistic. We want to ensure the best value, secure products supply, encourage local participation and grow capacity of indigenous companies. These are the aims of the programme. The companies are expected to pay taxes to the government, while we would get best and fair prices.”

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