The Federal Government’s committee tasked with implementing the sale of crude oil to local refineries in naira has successfully reached an agreement with Dangote Petroleum Refinery to begin the rollout of Premium Motor Spirit commonly known as petrol, in September 2024.
The government also announced that the sale of crude oil to Dangote Refinery and other domestic refineries would start 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 on Monday in Abuja.
The meeting, as reported on the finance ministry’s official X page, was held to assess progress on critical initiatives.
It also outlined the roles of key stakeholders such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the Central Bank of Nigeria, the Nigerian Upstream Petroleum Regulatory Commission, and the African Export-Import Bank to ensure smooth implementation.
Yhe post stated, “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.”
Additionally, 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 during the meeting, with significant production increases anticipated from November 2024.
The minister underscored the importance of transparency and instructed the Technical Sub-Committee to finalize details and prepare a report for the President, confirming that his directives were on track for implementation starting in September.
It is important to recall that on July 29, the Federal Executive Council approved President Tinubu’s proposal for the Nigerian National Petroleum Company to stop selling crude oil to local refineries in foreign currency.
The council approved that the 450,000 barrels allocated for domestic consumption be sold in naira to Nigerian refineries, with the Dangote refinery being used as a pilot case.
This initiative aims to stabilize the pump price of refined fuel and the exchange rate between the dollar and naira.
Current findings indicate that the Dangote Refinery 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 oil to local refineries in naira.
Monday’s meeting was the second to be held within a span of seven days.
Recently, local refineries have reported that they have not yet started purchasing crude oil in naira.
The Crude Oil Refiners Association of Nigeria indicated that letters were sent to the NNPC regarding this matter.
Eche Idoko, the Publicity Secretary of CORAN, told our correspondent last week that a meeting was held to address this issue.
Idoko revealed that CORAN is seeking crude supply contracts for refineries that are currently operational, as well as conditional crude supply contracts for those in the Authority to Construct and construction stages, to finalize their investment decisions and bring their refineries to full operation.
The CORAN spokesperson previously mentioned that supplying crude to local refineries in naira would lower the cost of petrol and strengthen the naira against the dollar.
Idoko praised President Tinubu for considering the needs of indigenous refiners but urged that an executive order be issued to formalize the new directive.
Dangote refinery and other domestic refiners have voiced concerns about the difficulties in accessing crude oil for their facilities. Recently, Dangote Group’s management asserted that International Oil Companies are still obstructing crude supply to the 650,000-barrel-capacity refinery.
In a statement, Dangote Group claimed that the IOCs insist on selling crude oil to its refinery through their foreign agents, noting that the local price of crude continues to rise because trading arms offer cargoes at $2 to $4 per barrel above the Nigerian Upstream Petroleum Regulatory Commission official price.
The group also accused foreign oil producers of prioritizing Asian markets when selling crude produced in Nigeria.
The PUNCH reports that the Dangote refinery was engaged in a dispute with the NUPRC over the alleged supply of 29 million barrels of crude oil to the refinery.
Meanwhile, the Arewa Consultative Forum has expressed its support for the Dangote Petroleum Refinery amid emerging controversies surrounding the facility.
In a statement issued by its National Publicity Secretary, Prof. Tukur Muhammad-Baba, on Monday in Kaduna, the ACF expressed concern over the negative discussions and controversies surrounding the world-class facility, which it described as a source of national pride.
“The ACF delegation, which visited the facility on July 30, 2024, was impressed by its sophisticated quality testing and control laboratories, which meet and surpass global industry standards,” the statement read.
The forum commended Aliko Dangote, the initiator and promoter of the Dangote Petroleum Refinery, as a courageous, visionary, and patriotic entrepreneur who deserves commendation and support.
