The committee established by the Federal Government to oversee the implementation of crude oil sales to local refineries in naira has finalized an agreement with Dangote Petroleum Refinery for the introduction of Premium Motor Spirit (petrol) in September this year.
The Federal Government revealed that the sale of crude oil to Dangote Refinery and other local refineries will kick off on October 1, 2024. This announcement was made by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a meeting with the Implementation Committee in Abuja on Monday. The meeting, aimed at reviewing the progress of key initiatives, outlined pivotal roles for various stakeholders such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Central Bank of Nigeria, Nigerian Upstream Petroleum Regulatory Commission, and the African Export-Import Bank to ensure a seamless execution of the plan. According to a post on the official X (formerly Twitter) page of the finance ministry, “The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, today led the Implementation Committee meeting on the transition to crude oil sales in naira.”
“The meeting reviewed progress on key initiatives, including the upcoming commencement of naira payments for crude oil sales to the Dangote Refinery starting October 1, 2024.”
Furthermore, the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, and the Chairman of the Technical Sub-Committee reported that “The first PMS delivery from Dangote is expected next month under existing agreements.”
Updates on the Port Harcourt and Dangote Refineries were also provided, with a significant boost in production expected from November 2024.
The minister stressed the importance of transparency and directed the Technical Sub-Committee to finalize the details and prepare a report for the President, ensuring that his directives are on track for implementation from September.
It is worth mentioning that the Federal Executive Council approved President Tinubu’s proposal on July 29 for NNPC to halt the sale of crude oil to local refineries in foreign currency.
The Federal Executive Council sanctioned that the 450,000 barrels designated for domestic consumption be offered in Naira to Nigerian refineries, with the Dangote refinery serving as a pilot project.
This move aims to stabilize the pump price of refined fuel and the dollar-naira exchange rate.
Current findings indicate that Dangote Refinery currently requires 15 cargoes of crude oil annually.
In response, the finance minister inaugurated a technical sub-committee tasked with developing the framework for the sale of crude to local refineries in Naira.
The meeting held on Monday marks the second within a span of seven days.
Recent statements from local refineries suggest that they are yet to commence purchasing crude oil in Naira.
The Crude Oil Refiners Association of Nigeria mentioned sending letters to the NNPC on this matter.
Eche Idoko, the Publicity Secretary of the Crude Oil Refiners Association of Nigeria, disclosed in a recent interview that discussions have taken place on this issue.
Idoko stated that CORAN is demanding a crude supply contract with operational refineries and a provisional contract with those in the construction phase to assist in finalizing their investment decisions and bringing their refineries to full capacity.
The CORAN representative previously highlighted that the supply of crude to local refineries in Naira would reduce petrol costs and bolster the Naira against the Dollar.
Although commending Tinubu for considering the input of local refiners, Idoko requested an executive order to formalize the new directive.
Dangote refinery and other local refiners have expressed challenges in accessing crude oil for their operations. Recent reports from the Dangote Group indicate that IOCs continue to impede crude supplies to the 650,000-capacity refinery.
In a statement, the group alleged that IOCs insist on selling crude oil to its refinery through their foreign agents, resulting in increased local crude prices since the trading arms offer cargoes at $2 to $4 per barrel above NUPRC’s official price.
The group further alleged that foreign oil producers seem to prioritize supplying crude from Nigeria to Asian countries over local refineries.
Reports have surfaced indicating a dispute between Dangote refinery and NUPRC over the alleged supply of 29 million barrels of crude oil to the refinery.
Meanwhile, the Arewa Consultative Forum has thrown its support behind the Dangote Petroleum Refinery amidst emerging controversies surrounding the facility.
In a statement issued by its National Publicity Secretary, Prof Tukur Muhammad-Baba, to the press in Kaduna on Monday, the ACF expressed apprehension over the negative debates and contentions surrounding the state-of-the-art facility, which it hailed as a source of national pride.
The forum praised Aliko Dangote, the initiator and advocate of DPRPI, as a courageous, visionary, and patriotic entrepreneur deserving of recognition and backing.