The Nigerian National Petroleum Company Limited is set to begin supplying crude oil in naira to the Dangote Petroleum Refinery this week, as part of the Federal Government’s naira-for-crude initiative.
Also, three more refineries are preparing to start producing petrol: the Aradel refinery in Rivers State (11,000 barrels per day), the Clairgold refinery in Delta State (20,000 barrels per day), and the Azikel refinery in Bayelsa (12,000 barrels per day), according to The PUNCH.
Officials at the $20 billion Dangote refinery in Lagos, along with operators of other domestic refineries, confirmed that the naira-for-crude supply deal has started.
They anticipate that crude oil will arrive at Africa’s largest refinery within the week.
On Saturday, the Federal Government announced the start of crude oil and refined product sales in naira.
This was shared by the Federal Ministry of Finance via a post on its X handle.
The statement read, “The Minister of Finance and Coordinating Minister of the Economy announced that, in line with the Federal Executive Council directive, the sale of crude oil and refined petroleum products in naira has officially commenced as of October 1, 2024.
“Following a meeting of the Implementation Committee, chaired by the Minister of Finance on October 3, 2024, to conduct a post-commencement review of the Crude Oil and Refined Products Sales in Naira initiative, the commencement of this strategic initiative was affirmed by key stakeholders.”
In response, officials at the Dangote refinery praised the government’s decision and expressed optimism that the crude oil would reach the plant this week, assuming no unforeseen issues arise.
“The deal is still a work in progress and I’m sure that by this week the committee should be done with it,” an impeccable senior source at the plant who spoke to our correspondent in confidence due to lack of authorisation to speak on the matter, stated.
When probed further to confirm if the crude supplied in naira had arrived at the plant, the official insisted that the deal “is a work in progress, adding that “nobody will say crude has arrived anywhere now.”
The source continued, “As of Friday, discussions about it were still ongoing. But I’m sure there will be a complete picture by this week. However, the whole thing is okay. It is a good signal about the crude oil supply in naira.
“And I can assure you that once the first cargo delivers the crude, I’ll send you a picture of it so that you’ll confirm that the deal has been completed. It is also for record purposes. You should have documents and photographs to show the first supply for such deals, having dates and possibly time of arrival.”
Another source at the plant stated that the naira-for-crude deal would last for six months under the first phase.
“The deal is for six months in the first instance. People shouldn’t think it is forever. This is a dollar-based business, so supplying it in naira though at the equivalent dollar rate is significant. The President should be commended for this.
“Otherwise, the local crude would have been purchased from foreign-based traders who often mark up their prices and this has its effect on the cost of producing refined commodities whether in Nigeria or elsewhere,” the official stated.
Earlier, the Crude Oil Refinery Owners Association of Nigeria and the Petroleum Retail Outlet Owners Association of Nigeria welcomed the government announcement regarding the naira-for-crude deal.
However, they called on the government to provide more details about the agreement.
“The details of this agreement is not known yet but we hope that the intricacies will be revealed to the public because this business is the central value of everything that happen in our economy. PMS is key and the pricing of the crude is important as it determines the price of the commodity.
“It will be a great thing for us to know the details and its implementation. However, we are happy with the deal and congratulate everyone involved,” the President of PETROAN, Billy Gillis-Harry, had stated.
In light of the government’s commitment to crude supply in naira, three modular refineries are preparing to begin petrol production. These refineries will complement the Dangote refinery, contributing to increased local petrol production and aiming to end petrol imports in Nigeria.
Sources indicated that the three modular refineries preparing to start petrol production include the 11,000 barrels per day Aradel refinery in Rivers State, the 20,000-barrel Clairgold refinery in Delta State, and the 12,000-barrel Azikel refinery in Bayelsa.
The owners of these refineries are at various stages of development. While modular refineries have been producing diesel, they have not yet begun petrol production.
