PUNCH
The Federal Government’s committee which was set up to ensure the implementation of crude oil sales to local refineries in naira has reached an agreement with the Dangote Petroleum Refinery for the rollout of Premium Motor Spirit, popularly called petrol, in September this year.
The Federal Government also disclosed that the sale of crude oil to Dangote Refinery and other local refineries will commence on October 1, 2024. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced this during a meeting with the Implementation Committee on Monday in Abuja. According to a post on the official X (formerly Twitter) page of the finance ministry, the meeting was to review progress on key initiatives. At the meeting, key roles were outlined for stakeholders, including 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 smooth implementation. The post read, “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.”
Also, 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.”
It also stated that updates on the Port Harcourt and Dangote Refineries were also provided, with significant production increases expected from November 2024.
The minister emphasised the need for transparency and directed the Technical Sub-Committee to finalize details and prepare a report for the President, confirming that his directives are on track for implementation from September.
Recall that the Federal Executive Council had on July 29 okayed President Tinubu’s proposal for NNPC to halt the sale of crude oil to local refineries in foreign currency.
The Federal Executive Council approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as a pilot.
The move is to ensure the stability of the pump price of refined fuel and the dollar-naira exchange rate.
Findings show that Dangote Refinery, at the moment, requires 15 cargoes of crude oil yearly.
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 marks the second to be held in seven days.
Recently, local refineries said they had yet to start buying crude oil in naira.
The Crude Oil Refiners Association of Nigeria said letters were written to the NNPC.
The Publicity Secretary of the Crude Oil Refiners Association of Nigeria, Eche Idoko, told our correspondent last week that a meeting was held to that effect.
He disclosed that CORAN is asking for a crude supply contract with refineries that are operating and a conditional crude supply contract with those who are currently at ATC (Authority To Construct) and construction stages to enable the close out on their final investment decisions and bring their refineries to full operation.
The CORAN spokesperson has earlier stated that the supply of crude to local refineries in naira would bring down the cost of petrol and strengthen the naira against the dollar.
Idoko, who commended Tinubu for listening to the voice of indigenous refiners, however, pleaded that an executive order should be issued on the new directive.
Dangote refinery and other domestic refiners have been complaining about the difficulties associated with accessing crude oil for their plants. Recently, the management of Dangote Group insisted that the IOCs were still frustrating crude supply to the 650,000-capacity refinery.
In a statement, the group alleged that the IOCs insisted on selling crude oil to its refinery through their foreign agents, saying the local price of crude will continue to increase because the trading arms offer cargoes at $2 to $4 per barrel, above NUPRC official price.
The group also alleged that the foreign oil producers seem to be prioritising Asian countries in selling the crude they produce in Nigeria.
The PUNCH reports that the Dangote refinery engaged in an exchange of words with the NUPRC over the alleged supply of 29 million barrels of crude oil to the refinery.
