Nigeria to Commence Crude Oil Sales to Local Refineries in Naira from October 1, 2024

The Nigerian Federal Government has announced that it will commence the sale of crude oil to local refineries, including the Dangote Refinery, in naira from October 1, 2024. This decision was made public by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a meeting with the Implementation Committee in Abuja on Monday.

According to a post on the official Twitter page of the finance ministry, the meeting reviewed progress on key initiatives, including the upcoming commencement of naira payments for crude oil sales to the Dangote Refinery. The meeting also outlined key roles for 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, to ensure smooth implementation.

The Executive Chairman of the Federal Inland Revenue Service, Dr Zacch Adedeji, and the Chairman of the Technical Sub-Committee reported that the first PMS delivery from Dangote is expected next month under existing agreements. Updates were also provided on the Port Harcourt and Dangote Refineries, with significant production increases expected from November 2024.

The minister emphasized the need for transparency and directed the Technical Sub-Committee to finalize details and prepare a report for the President, confirming that his directives are on track for implementation from September. This move is aimed at ensuring the stability of the pump price of refined fuel and the dollar-naira exchange rate.

The Federal Executive Council had previously approved President Tinubu’s proposal for NNPC to halt the sale of crude oil to local refineries in foreign currency. The council approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as a pilot.

Dangote Refinery currently requires 15 cargoes of crude oil yearly. In response to this decision, 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.