President Bola Ahmed Tinubu has called on refineries located in Nigeria to prioritize local production of petrol and petroleum products. He emphasized the need for these facilities to supply enough fuel to meet domestic demands, thereby reducing the country’s dependence on imported petroleum products.
During a recent review meeting at the State House in Abuja, the president articulated that this shift would facilitate the allocation of foreign exchange towards the growth of the real sector. By relying less on imports, Nigeria can strengthen its economic foundations and promote local industries.
The president highlighted that the implementation of naira-based sales of crude oil and refined products was a strategic move aimed at overcoming the challenges posed by fluctuating exchange rates. This initiative is designed to stabilize the oil market and enhance the financial sustainability of the sector.
Tinubu cautioned that any solutions proposed for crude oil and refined product sales in naira should not revert to the practices seen over the past four decades. He stressed the importance of learning from historical experiences to avoid repeating past mistakes.
He acknowledged that while there could be adjustments in costs and revenues within the oil sector, it is crucial for the government to adopt a modern approach rather than resorting to outdated methods. This forward-thinking mindset is essential for the sector’s growth.
The president urged stakeholders to collaborate effectively, suggesting that they utilize Afreximbank as a settlement bank to streamline naira pricing for crude oil and refined products. Afreximbank’s involvement as a financial adviser is seen as a positive step towards achieving this goal.
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Tinubu asserted that the market must play a decisive role in determining profits and losses within the oil sector. By allowing market forces to dictate these dynamics, both independent marketers and government entities can engage in productive discussions on pricing and revenue sharing.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, reinforced the president’s stance, declaring that the administration’s commitment to selling crude in naira is unwavering. He emphasized that the government would not intervene in determining the exchange rates for oil transactions.
The meeting also featured insights from Aliko Dangote, the President and Chief Executive of Dangote Group. He informed the president that his refinery currently holds over 500 million litres of fuel in reserve, having already supplied 400 million litres to the Nigerian economy.
This dialogue among key stakeholders reflects a concerted effort to enhance Nigeria’s oil sector. By focusing on local production and innovative financial strategies, the government aims to create a more self-sufficient and resilient economy, ultimately benefiting the nation as a whole.
