There are indications that the Nigerian National Petroleum Company Limited has not yet commenced the supply of crude oil in naira to the Dangote Petroleum Refinery, which was scheduled to start on October 1.
Officials from the Dangote refinery, the Nigerian Upstream Petroleum Regulatory Commission, the Federal Ministry of Finance, and NNPC have not provided updates regarding the naira-for-crude deal, according to The PUNCH.
It was previously reported that the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency had confirmed that the supply of crude in naira by NNPC to the Dangote refinery would begin on Tuesday, October 1, 2024.
This announcement follows the Federal Executive Council’s approval on September 13, 2024, under President Bola Tinubu, which allowed for the sale of crude to local refineries and the corresponding purchase of petroleum products in naira.
“From October 1, NNPC will commence the supply of about 385kbpd (385,000 barrels per day) of crude oil to the Dangote refinery to be paid for in naira,” the committee had declared.
The Chairman of the Technical Sub-Committee is Zacch Adedeji, who doubles as Chairman of the Federal Inland Revenue Service.
The Special Adviser on Media to the FIRS Chairman, Mr Dare Adekanmbi confirmed on Sunday that the plan for the crude oil supply to the $20 billion Lekki-based refinery remains intact.
“I can confirm that the Chairman of the Sub-Technical Committee, Zacch Adedeji, is working day and night to ensure that things go according to plans. He knows how important it is to have the agreement implemented as has been planned for the benefit of Nigerians,” Adekanmbi had stated.
However, on Thursday, sources from three domestic refineries indicated they were unaware if the deal had begun.
NNPC officials remained silent when approached for updates, redirecting inquiries to the Ministry of Finance, which did not respond when contacted.
However, a senior official from a domestic refinery stated that crude oil refiners, including Dangote, are still awaiting the Federal Government to initiate the supply of crude in naira.
The official also mentioned that the government, via its committee on crude-for-naira, had assured operators that efforts were underway to fulfill the deal.
“You know that said it was to start on October 1, the technical committee is the one in charge now and they are working on it. They are supposed to arrive at a particular agreement and communicate it to us.
“But I can tell you that as of this moment, we haven’t received that communication yet. We are still waiting for them,” the operator who spoke in confidence due to lack of authorisation to speak on the matter, stated.
Another source from a major modular refinery, familiar with the deal, stated, “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, I’d like to state that deals of this nature take a while before they are completed. There are a lot of things to be sorted before a final decision is reached. So we have to wait for them.”
The government explained in September that the naira-for-crude initiative would help reduce pressure on the naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country.
“Since then, the implementation committee chaired by the Minister of Finance and we, the technical committee, have worked intensely with NNPC and Dangote refinery to fashion out the details of the modalities for the implementation of the FEC approval,” Adedeji had stated.
The committee chairman and FIRS boss stated that crude would be sold to Dangote in naira starting October 1. In return, the Dangote refinery will supply petrol and diesel of equivalent value to the domestic market, with payments made in naira.
“Diesel will be sold in naira by the Dangote refinery to any interested off-taker. PMS will only be sold to NNPC. NNPC will then sell to various marketers for now. All associated regulatory costs (NPA, NIMASA, etc.) will also be paid in naira. We are also setting up a one-stop shop that will coordinate service provision from all regulatory agencies, security agencies, and other stakeholders to ensure a smooth implementation of this initiative.”
