Oil marketers and domestic refiners are calling on the Federal Government to provide detailed information regarding the recently announced naira-for-crude initiative, which officially began on October 1, 2024.
This initiative, as outlined by the Ministry of Finance, allows for the sale of crude oil and refined products in naira, following a directive from the Federal Executive Council.
The Crude Oil Refinery Owners Association of Nigeria and the Petroleum Retail Outlet Owners Association of Nigeria have expressed the need for more comprehensive details surrounding the agreement.
In a statement posted on X, the Ministry of Finance confirmed the initiative’s launch and noted that the implementation committee, chaired by the Finance Minister, reviewed and endorsed it shortly after.
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.”
The President of PETROAN, Billy Gillis-Harry, welcomed the initiative but emphasized the importance of transparency, particularly concerning pricing structures.
He said, “PETROAN as an organization introduced the argument that crude oil should be sold to Nigerian in-country refineries in naira. We said the government should come up with a policy that thinks out of the box to give value to this suggestion. We are happy and congratulate the current administration for crystalizing that suggestion.”
He reiterated PETROAN’s advocacy for selling crude to local refineries in naira, congratulating the current administration for advancing this proposal.
The Publicity Secretary of CORAN, Eche Idoko, expressed optimism about the initiative’s potential benefits for domestic refining, although he acknowledged the lack of detailed information at this stage.
“It is a welcome development considering the impact which this move will have on domestic crude oil refining. So we commend the government for that and hope the deal sails smoothly,” Idoko noted.
Idoko acknowledged the positive reactions to the naira-for-crude agreement but noted a lack of detailed information, promising updates as they become available.
This initiative stems from a September announcement by the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency, which was approved by President Bola Tinubu’s administration.
The Nigerian National Petroleum Company is set to supply approximately 385,000 barrels of crude oil daily to the Dangote Refinery, with transactions conducted in naira. While the supply is expected to commence in October, responses from Dangote and other refinery officials have been sparse.
The government emphasized that the initiative aims to alleviate pressure on the naira, reduce transaction costs, and stabilize petroleum product supplies.
Special Adviser to the President on Revenue, Zaccheus Adedeji, outlined that crude oil would be exchanged directly for refined products, with diesel available for general sale and petrol exclusively for NNPC distribution.
On October 5, 2024, the Ministry of Finance confirmed the agreement’s initiation following a meeting with key stakeholders, including the Minister of State for Petroleum and NNPC executives.
However, details about the pricing structure and full implementation plan are still awaited by industry stakeholders and the public.
