Nigeria Takes Major Step Towards Energy Self-Sufficiency: Crude Purchase and Product Sales in Naira Commence
Abuja, Nigeria – September 13, 2024
In a landmark development aimed at reducing pressure on the naira, eliminating transaction costs, and enhancing the availability of petroleum products, the Federal Government has officially launched the sale of crude oil to local refineries and the corresponding purchase of petroleum products in naira.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, announced the breakthrough in his office in Abuja, represented by the Executive Chairman of the Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji. The announcement followed a meeting of the Technical Sub-Committee on the sale of crude oil to local refineries in naira.
According to the Minister, all agreements and modalities have been finalized for the implementation of the Federal Executive Council’s (FEC) approval of the initiative. The initiative is expected to significantly bolster the Nigerian economy by reducing the demand for foreign exchange in the petroleum sector.
“Recall that the FEC, under the leadership of Mr. President, approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira,” Mr. Edun stated. “This initiative will help reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products in the country.”
The Minister confirmed that the first batch of Premium Motor Spirit (PMS) from the Dangote Refinery would begin loading on Sunday, September 15, with the Nigerian National Petroleum Company Limited (NNPCL) set to supply approximately 385,000 barrels per day of crude oil to the Dangote Refinery starting October 1, 2024. Both transactions—crude oil supply and product delivery—will be conducted in naira.
In return, the Dangote Refinery will supply PMS and diesel to the domestic market. While diesel will be sold in naira to any interested buyer, PMS will be exclusively sold to NNPCL, which will then distribute it to various marketers. Additionally, all associated regulatory costs from agencies such as the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) will also be paid in naira.
To ensure a seamless process, the government has also set up a “one-stop shop” to coordinate service provision from regulatory and security agencies, as well as other stakeholders. This facility will be located at the NPA in Lagos.
“We thank everyone for the hard work and patriotism exhibited over the last couple of weeks,” Mr. Edun said, extending his gratitude to President Bola Tinubu for championing this initiative. “This initiative marks a significant milestone in Nigeria’s journey towards energy self-sufficiency and economic growth.”
The Federal Government believes this innovative approach will set Nigeria on a sustainable path toward energy independence and reduce its reliance on imported fuel products, benefiting the economy and the country at large.
This initiative is seen as a bold step in addressing Nigeria’s long-standing energy challenges and fortifying the nation’s economy amidst a volatile global oil market.
