Naira Crude Sale Yet to Happen – Operators

The Dangote Petroleum Refinery and other domestic refineries in Nigeria have not yet begun purchasing crude oil in naira, despite a directive from President Bola Tinubu. The $20bn Dangote refinery and other local refineries were expected to start buying crude from the Nigerian National Petroleum Company Limited (NNPC) in naira, following a recent Federal Executive Council (FEC) approval. This directive, using the Dangote refinery as a pilot, aimed to offer the 450,000 barrels meant for domestic consumption in naira, with a fixed exchange rate for the transaction. However, nearly a week after this announcement, no such transactions have occurred. The Crude Oil Refiners Association of Nigeria (CORAN) confirmed that individual refiners had sent requests to NNPC for crude supply but received no response. Eche Idoko, the Publicity Secretary of CORAN, noted that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) was expected to initiate discussions to establish the framework for these transactions.

Idoko praised Tinubu for acknowledging the concerns of indigenous refiners and suggested that an executive order or new guidelines be established to legally enforce the directive. The local refiners believe that purchasing crude in naira would reduce the cost of petrol and strengthen the naira against the dollar.

Additionally, the management of Dangote Group highlighted challenges in securing crude oil, alleging that International Oil Companies (IOCs) were obstructing the supply by insisting on sales through foreign agents. This situation has resulted in the local price of crude remaining high, as foreign trading arms offer cargoes at prices above the official rates set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). A senior official at the Dangote refinery, speaking anonymously, confirmed that the refinery had not yet begun purchasing crude in naira from NNPC. The spokesperson of NNPC, Olufemi Soneye, did not provide comments on the situation.