Investigate all Crude Swap Deals – Policy Alert tells Tinubu administration

Policy Alert, a civil society organisation working to promote economic and ecological justice in Nigeria, has called on the President Bola Tinubu’s  administration to commence a thorough investigation of all  crude swap deals entered into by the Nigerian government with commodity traders since 2010.

The organisation said the investigation should be geared towards exposing and bringing to book those who facilitated or benefited from the corruption-prone regimes.

The group chief executive officer (GCEO) of Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, had announced recently that the company has commenced the termination of crude oil swap deals and the national oil company will now pay for its purchases in cash, adding that less petrol will be imported by NNPCL while private companies will import the bulk.

However, in a public conversation on the theme, “Beneficial ownership and Nigeria’s crude swaps – priorities for the new administration,” organised by Policy Alert on Twitter Spaces on Tuesday,  the civil society organisation said that while the decision of the NNPCL to end crude oil swap deals is commendable, it would only amount to half-measures if the corrupt and inefficient system underpinning the swaps was not investigated, lost revenue recovered, culprits punished, and safeguards instituted. 

Policy Alert in a communique issued after the Twitter Space noted “It would be counter-productive to allow politically exposed persons who were involved in corrupting the present regime to continue presiding over fresh transactions under the new administration”.

“Participants applauded the NNPCL over the decision to end the swaps,” the communique noted. “This is long overdue and would plug the massive revenue leakages suffered by the Nigerian state over the years due to under-delivery, unpaid tax liabilities, importation of dirty fuels, and other violations by oil traders.

“The swap deals, whether in its previous forms as the Refined-Product Exchange Agreement (RPEA) and Offshore Processing Agreement (OPA), or in its most recent form as Direct Sales Direct Purchase (DSDP), have been poorly regulated, opaque, and prone to corruption resulting in billions of dollars in losses to government.”

The organisation stated that ending the swaps is not enough rather it should be followed by a thorough investigation of all the swap deals up to now to expose and bring to book those who facilitated or benefited from the corruption-prone regimes. 

Policy Alert insisted that the NNPCL owes it to the Nigerian public to publish the traded volumes, payments received by government and status of outstanding liabilities owed the federation from its oil-for-product swap deals with oil and gas commodity trading companies particularly between 2010 till date.

The communique added “The company must ensure that, going forward, transparent criteria are set for selecting the private importers  to avoid a repeat of past mistakes, and this must include the disclosure of beneficial owners of the contracted firms. Meanwhile, we urge the Tinubu administration to leverage the recently launched register of Persons with Significant Control as an inter-agency tool to pass a strong signal to those who have been ripping off the country’s oil resources that it is no longer business as usual.”