Operators confirm that the sale of crude oil in Naira is still pending, with no transactions yet occurring.
Despite President Bola Tinubu’s directive, the purchase of crude oil in naira has not yet commenced at The Dangote Petroleum Refinery and other local refineries.
Last week, Tinubu instructed the $20bn plant and other nearby refineries in Nigeria to commence purchasing crude oil from the Nigerian National Petroleum Company Limited using naira. However, despite this directive being issued, these entities have not yet begun following through with it.
Individual refiners have requested crude from NNPC, but the Crude Oil Refiners Association of Nigeria reports that they have not received a response to their written letters.
Tinubu’s proposal to sell crude oil in naira, was recently approved by the Federal Executive Council for Dangote refinery and other upcoming refineries.
The FEC has given the green light for 450,000 barrels intended for local use to be sold in Naira currency to Nigerian refineries. To test this process, Dangote refinery will serve as a pilot project with a fixed exchange rate throughout the duration of the transaction.
Despite the announcement being made almost a week ago, the refiners reported that they had yet to hear from NNPC.
According to Eche Idoko, the Publicity Secretary of the Crude Oil Refiners Association of Nigeria, initiation of proceedings is anticipated from the Nigerian Midstream and Downstream Petroleum Authority.
Crude oil purchases from NNPC have not commenced yet. The refineries’ individual members have already corresponded with them, submitting multiple requests that are currently under review by NNPC.
Idoko pointed out that the NMDPRA, which is our regulator in this case, should typically take the initiative to convene a meeting with all parties involved to discuss the supply framework. Alternatively, NNPC could respond to letters from refineries requesting crude oil.
Earlier, the spokesperson for CORAN had mentioned that providing crude oil to domestic refineries in exchange of naira would lower petrol costs and bolster the strength of the dollar against it.
According to Idoko, Tinubu deserves praise for heeding the pleas of local refiners; however, an executive order must be implemented regarding this updated instruction.
The economic team was also approached by the crude oil refiners, who suggested a meeting to determine an advantageous rate for the Nigerian market.
Idoko stated that the pricing of fuel will experience a resurgence following implementation of the President’s order. He emphasized that merely announcing it would not suffice and called for legal enforcement through an executive order or incorporation into new regulations, so crude producers are legally obliged to sell in naira.
The Dangote refinery and other local refiners have raised concerns over the challenges in obtaining crude oil for their facilities. In a recent development, the leadership of Dangote Group reiterated that International Oil Companies (IOCs) were impeding the delivery of crude to their colossal 650,000-capacity plant.
According to the group’s statement, the IOCs have reportedly continued to sell crude oil to its refinery solely through foreign agents. The group claims that this is causing an increase in local crude prices as trading arms are offering cargoes at a rate of $2-$4 per barrel more than the official NUPRC price.
The group claimed that the foreign oil producers appeared to favor selling their Nigerian crude specifically to Asian countries.
According to an unidentified senior official at the Dangote refinery who did not wish to disclose their name due to lack of authorization, it has been confirmed that the plant is still not purchasing crude from NNPC using naira.
Our correspondent reached out to Olufemi Soneye, the spokesperson of NNPC regarding this matter but received no response.
