Crude Oil Supply in Naira to Dangote Refinery Yet to Begin Amid Expectations
Reports of a significant deal to supply crude oil in naira to the Dangote Petroleum Refinery had created a buzz in recent weeks. However, officials from the Nigerian National Petroleum Company Limited (NNPC) and the Dangote refinery have remained silent when asked about the current status of the agreement, sparking concerns about the reality of the deal.
Initially, the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency had confirmed on September 13, 2024, that NNPC would commence the supply of about 385kbpd (385,000 barrels per day) of crude oil to the Dangote refinery in naira from October 1, 2024.
According to sources with the Technical Sub-Committee, the deal was seen as a crucial step to reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country. The Federal Executive Council, under President Bola Tinubu, had approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira.
Senior officials from the domestic refinery have stated that they were still awaiting the Federal Government’s supply of crude oil in naira. An official from the refinery confided that the government committee had assured operators that efforts were in top gear to deliver on the deal.
As of Thursday, October 3, there is still no indication that the supply of crude oil has commenced. Officials from NNPC, the Nigerian Upstream Petroleum Regulatory Commission, the Federal Ministry of Finance, and the Dangote refinery have remained mute when contacted for updates.
“It’s a waiting game at the moment,” an operator with a major modular refinery said. “The crude oil refiners’ body in Nigeria hasn’t been communicated yet on the deal. So we await the official communication because up till last week, we spoke with them (the government) and they assured us that the deal was still on course.”
However, the government has highlighted the benefits of the initiative, including reducing pressure on the naira, eliminating unnecessary transaction costs, and improving the availability of petroleum products across the country. According to the Technical Sub-Committee Chairman, Zacch Adedeji, the committee is working tirelessly to ensure a smooth implementation of the initiative.
