In a strategic move aimed at strengthening the naira and stabilizing fuel prices, the Federal Government has announced that sales of crude oil to Dangote Refinery and other local refineries will commence October 1, 2024.
This initiative marks a significant milestone as payments will be made in naira, a move aimed at stabilising the naira and the pump price of refined fuel.
This was disclosed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a meeting with the Implementation Committee on Monday in Abuja.
As outlined in a post on the official X (formerly Twitter) page of the finance ministry, the meeting was to review progress on key initiatives.
At the meeting, key roles were assigned to various 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. These entities are expected to ensure the smooth implementation of the new crude oil sales framework.
The post states, “The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, today led the Implementation Committee meeting on the transition to crude oil sales in naira.
“The meeting reviewed progress on key initiatives, including the upcoming commencement of naira payments for crude oil sales to the Dangote Refinery starting October 1, 2024.”
This decision follows the Federal Executive Council’s approval on July 29, 2024, of President Tinubu’s proposal to sell crude oil to local refineries in naira instead of foreign currency. Initially, 450,000 barrels meant for domestic consumption will be offered in naira, starting with the Dangote Refinery as a pilot program.
The Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, and the Chairman of the Technical Sub-Committee, reported that the first delivery of Premium Motor Spirit (PMS) from the Dangote Refinery is expected next month under existing agreements. Additionally, updates were provided on the expected production increases from both the Port Harcourt and Dangote Refineries, which are anticipated to begin in November 2024.
The minister has, however, emphasised the need for transparency and directed the Technical Sub-Committee to finalise details and prepare a report for the President, confirming that his directives are on track for implementation from September.
Reports show that Dangote Refinery, at the moment, requires 15 cargoes of crude oil yearly.
In response, the finance minister inaugurated a technical sub-committee tasked with developing the framework for the sale of crude oil to local refineries in naira.
Monday’s meeting marks the second to be held in seven days.
