FG Initiates Naira-Based Crude Oil Sales to Dangote Refinery

The Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency has confirmed that the Nigerian National Petroleum Company (NNPC) Limited will begin supplying crude oil to the Dangote Petroleum Refinery in naira from October 1, 2024.

Daily Report Nigeria reports that this move is expected to reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country.

The committee also disclosed that the Dangote refinery will supply equivalent volumes of refined diesel and petrol to the domestic market, which will be paid for in naira.

Chairman of the Technical Sub-Committee, Zacch Adedeji, who also serves as the Chairman of the Federal Inland Revenue Service, stated that the committee has worked intensively with NNPC and Dangote refinery to finalize the details of the initiative.

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He added that the technical committee would transition to an implementation execution and monitoring committee, which would operate out of Lagos for the next three to six months.

However, modular refineries have called on the government to extend the supply of crude to their plants as well.

The Publicity Secretary of the Crude Oil Refinery-owners Association of Nigeria, Eche Idoko, stated that the committee is only discussing with Dangote at the moment and has not provided clear communication on how the naira sale will be administered to other refineries.

Even though Nigerians are hopeful that this move will lead to a reduction in petrol prices, the Federal Government has stated that it will not interfere in the price controversy between the NNPC and Dangote, citing that the petroleum sector has been deregulated.