In a landmark move in reducing pressure on the Naira, eliminating unnecessary transaction costs, and improving the availability of petroleum products, the Federal Government has successfully initiated the sale of crude to local refineries as well as the corresponding purchase of petroleum products in Naira.
The Hon. Minister of Finance and Coordinating Minister of the Economy announced that, in line with the Federal Executive Council (FEC) directive, the sale of crude oil and refined petroleum products in Naira has officially commenced as of October 1st, 2024.
Following a meeting of the Implementation Committee, chaired by the Hon. Minister of Finance and Coordinating Minister of the Economy on October 3rd, 2024, to conduct a post-commencement review of the Crude Oil and Refined Products Sales in Naira initiative, the commencement of this strategic initiative was affirmed by key stakeholders.
The meeting included the Hon. Minister of State, Petroleum (Oil), the Special Adviser to the President on Revenue, the Special Adviser to the President on Energy, and the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Also present in the meeting were the representative of the Chairman of Dangote Group, the Vice President of Dangote Group, and the management of the Nigerian National Petroleum Company (NNPC), led by the Group Chief Executive Officer (GCEO), Chief Financial Officer (CFO), and Executive Vice President (Downstream).
The above disclosure was a follow-up to a previous press release made by the ministry on September 13, 2024, signed by the Director, Information and Public Relations Mohammed Manga FCIA shortly after the Technical Sub-Committee meeting on the sale of crude oil to local refineries in Naira was held in Abuja office.
Represented by the Executive Chairman Federal Inland Revenue Service (FIRS) Dr Zacch Adedeji, the Minister has announced that the completion of all agreements and modalities for the implementation of the Federal Executive Council (FEC) approval on the sale of crude to local refineries in Naira and corresponding purchase of petroleum products in Naira have been concluded and will take effect on October 1t, 2024.
According to Executive Chairman Federal Inland Revenue Service (FIRS) Dr. Zacch Adedeji, the approval of the sale of crude in Naria will indirectly ease the pressure it exerts on the naira and will invariably reduce pressure on the Naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products in the country.
“Recall that the FEC under the leadership of Mr. President approved the sale of crude to local refineries in Naira and corresponding purchase of petroleum products in Naira. This initiative will help reduce pressure on the Naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products in the country,” Dr Zacch said.
Expressing his delight on an assiduous job done by the committee and the positive effect of its implementation, Dr. Adedeji stated that the committee chaired by the Hon. Minister of Finance and the technical committee have worked intensely with NNPCL and Dangote Refinery to fashion out the details of the modalities for the implementation of the FEC approval
“From 1st October, NNPC will commence the supply of about 385kbpd of crude oil to the Dangote Refinery to be paid for in Naira. In return, the Dangote Refinery will supply PMS and diesel of equivalent value to the domestic market to be paid for in Naira.
“Diesel will be sold in Naira by the Dangote Refinery to any interested off-taker. PMS will only be sold to NNPC, NNPC will then sell to various marketers for now.
All associated regulatory costs (NPA, NIMASA, etc.) will also be paid for in Naira,” He posited.
“We are also setting up a one-stop shop that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative. This will be located in NPA, Lagos,” Dr. Zacch added.
