Crude Oil Sales To Dangote In Naira Begin October 1

(iexclusivenews) – Federal Government of Nigeria has announced plans to commence crude oil sales in the national currency, Naira, to Dangote Refinery and other local refineries starting October 1, 2024.

This significant shift in policy aims to stabilize fuel prices and strengthen the Naira against foreign currencies.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed this decision during a recent Implementation Committee meeting in Abuja.

The meeting focused on reviewing progress on key initiatives related to the transition to Naira-based crude oil sales.

Key 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, have been assigned crucial roles to ensure smooth implementation of this new policy.

The Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, reported that the first delivery of Premium Motor Spirit (PMS) from Dangote Refinery is expected next month under existing agreements.

This development marks a significant milestone in Nigeria’s efforts to boost domestic refining capacity and reduce dependence on imported fuel.

Boosting Domestic Refining and Economic Stability

The Implementation Committee also received updates on the Port Harcourt and Dangote Refineries, with substantial production increases anticipated from November 2024.

This increase in domestic refining capacity is expected to play a crucial role in stabilizing fuel prices and reducing the country’s reliance on imported petroleum products.

Minister Edun emphasized the need for transparency throughout the implementation process.

He directed the Technical Sub-Committee to finalize details and prepare a comprehensive report for the President, confirming that the directives are on track for implementation from September.

This move follows the Federal Executive Council’s approval of President Tinubu’s proposal on July 29, which mandated the Nigerian National Petroleum Corporation (NNPC) to halt the sale of crude oil to local refineries in foreign currency.

The council approved offering 450,000 barrels meant for domestic consumption in Naira to Nigerian refineries, using the Dangote refinery as a pilot.

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Implications for Nigeria’s Economy and Currency

The decision to sell crude oil in Naira is expected to have far-reaching implications for Nigeria’s economy.

By reducing the demand for foreign currency in the oil sector, the government aims to stabilize the Naira-dollar exchange rate and potentially strengthen the local currency.

This policy shift is particularly significant for the Dangote Refinery, which currently requires 15 cargoes of crude oil annually.

The transition to Naira-based purchases is expected to ease the pressure on foreign exchange reserves and potentially lead to more stable fuel prices for Nigerian consumers.

The finance minister has also inaugurated a technical sub-committee tasked with developing the framework for the sale of crude oil to local refineries in Naira.

This committee’s work will be crucial in ensuring a smooth transition and addressing any potential challenges that may arise from this new policy.

As Nigeria moves towards implementing this landmark decision, stakeholders in the oil and gas sector, as well as economic analysts, will be closely watching its impact on the country’s economy, currency stability, and overall energy security.