The Nigerian government has announced that it will commence the supply of crude oil in Naira to the Dangote Refinery starting Tuesday, October 1, 2024, in a bid to reduce the cost of Premium Motor Spirit (PMS), commonly known as petrol, across the country.
This initiative, spearheaded by the Nigerian National Petroleum Company Limited (NNPCL), aims to stabilize fuel prices by cutting foreign exchange costs associated with crude oil purchases.
The development was confirmed on Sunday by Dare Adekanmbi, spokesperson for Zacch Adedeji, Chairman of the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency, and the Chairman of the Federal Inland Revenue Service (FIRS).
Adekanmbi stated, “I can confirm to you that the Chairman, Sub-Technical Committee, Zacch Adedeji, is working day and night to ensure that things go according to plan.” He knows how important it is to have the agreement implemented as planned for the benefit of Nigerians.”
READ ALSO: FG To Begin Crude Oil Sales To Dangote Refinery In Naira From October 1
The decision follows the Federal Executive Council’s approval on September 13, 2024, under President Bola Tinubu’s administration, to allow the sale of crude oil to local refineries in Naira. This strategic move also includes the purchase of refined petroleum products in Naira, a step expected to provide significant relief in the pricing of petroleum products in the domestic market.
According to the committee, NNPCL will begin the supply of approximately 385,000 barrels per day (bpd) of crude oil to the Dangote Refinery, which translates to about 11.5 million barrels of crude per month. In exchange, the Dangote Refinery will release equivalent volumes of refined diesel and petrol into the domestic market, also in Naira.
The move has generated mixed reactions, with Eche Idoko, the publicity secretary of the Crude Oil Refinery Owners Association of Nigeria, calling for the Naira-for-crude deal to be extended to other modular refineries in the country. “The committee is only discussing with Dangote at the moment,” Idoko noted, emphasizing the need for broader inclusivity to support other local refineries.
READ ALSO: Tinubu Directs NNPC To Sell Crude To Dangote Refinery In Naira
The anticipated agreement comes amid skyrocketing fuel prices nationwide, with Nigerians currently purchasing petrol between N950 and N1,100 per liter. In August 2024, the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, stated that selling crude to local refineries in Naira would lead to a decrease in petrol prices.
The NNPCL had earlier revealed that it purchased refined petrol from the Dangote Refinery at N898 per liter following the lifting of petrol by the refinery on September 15, 2024. However, the $20 billion Dangote Refinery disputed this price, prompting calls for the Adedeji-led committee to disclose the official price of the refinery’s products upon the implementation of the crude-for-Naira deal.
Amid the ongoing discussions, Aliko Dangote, President of Dangote Group, recently stated that the gasoline produced at his refinery is cheaper than imported products. However, he did not disclose the exact price, sparking concerns among consumers and lawmakers.
READ ALSO: NNPC Ltd Tackles Dangote Refinery, Insists Buying Petrol At N898 Per Litre
The House of Representatives has since mandated the Dangote Refinery to reveal the price of its gasoline, but the information remains undisclosed as of now.
The Naira-for-crude initiative is expected to have a significant impact on the downstream petroleum sector, with hopes that it will bring much-needed relief to Nigerians grappling with high fuel prices. As the agreement takes effect, all eyes will be on the Adedeji-led committee to ensure transparency and effective implementation.
