Naira-for-Crude
The planned supply of crude oil by the Nigerian National Petroleum Company Limited (NNPC) to the Dangote Petroleum Refinery, set to start on October 1, 2024, has not yet begun as of Thursday, October 3. Key officials from the Dangote Refinery, Nigerian Upstream Petroleum Regulatory Commission, Federal Ministry of Finance, and NNPC have remained silent on the status of the naira-for-crude deal.
Earlier reports indicated that the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency had confirmed the supply would start on October 1. This follows a September announcement that the Federal Executive Council, under President Bola Tinubu, approved selling crude oil to local refineries in naira, with the purchase of refined products also in naira.
The plan, as outlined, involves NNPC supplying around 385,000 barrels per day of crude oil to the Dangote Refinery, to be paid for in naira. Zacch Adedeji, Chairman of the Federal Inland Revenue Service and head of the technical committee overseeing this project, had affirmed that efforts were being made to meet the October 1 deadline.
Read Also: Meta Simplifies Earning for Facebook Creators with New Program.
However, sources from domestic refineries have reported that they have yet to receive confirmation that the deal has commenced. NNPC officials referred inquiries to the Ministry of Finance, which has not provided any updates. A senior official from a domestic refinery noted that while assurances had been given by the government, refineries, including Dangote’s, are still waiting for the crude supply to start under the new arrangement.
A source from a modular refinery mentioned that while discussions with the government last week confirmed that the deal was on track, such agreements can take time to finalize due to their complexity.
The naira-for-crude initiative aims to reduce pressure on the naira, lower transaction costs, and improve the availability of petroleum products. As explained in September, the refinery will supply petrol and diesel to the domestic market, with the payment for these products made in naira. Diesel will be available to any buyer, while petrol will be sold only to NNPC, which will then distribute it to marketers. Additionally, all related regulatory fees will be paid in naira.
Adedeji stated that the technical committee would transition into a monitoring and implementation team, operating from Lagos for the next three to six months to oversee the initiative’s rollout.
