The Federal Government of Nigeria has announced that the sale of crude oil to the Dangote Refinery and other local refineries will commence on October 1, 2024.
This move is part of a broader strategy to transition crude oil sales to the local currency, naira.
The disclosure was made by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, during a meeting with the Implementation Committee on Monday in Abuja.
The meeting, held to review progress on key initiatives, included representatives from various stakeholders, such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the Central Bank of Nigeria, the Nigerian Upstream Petroleum Regulatory Commission, and the African Export-Import Bank.
According to a statement released on the official X (formerly Twitter) page of the finance ministry, the committee outlined specific roles for these stakeholders to ensure a smooth implementation of the initiative. The statement highlighted that naira payments for crude oil sales to the Dangote Refinery are set to begin in October.
Additionally, the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, and the Chairman of the Technical Sub-Committee reported that the first delivery of Premium Motor Spirit (PMS) from the Dangote Refinery is expected next month under existing agreements. Significant production increases are also anticipated from the Port Harcourt and Dangote refineries starting in November 2024.
Minister Wale Edun emphasised the importance of transparency in the implementation process and directed the Technical Sub-Committee to finalise details and prepare a report for President Bola Tinubu, confirming that the directives are on track for September implementation.
This development follows the Federal Executive Council’s approval on July 29 of President Tinubu’s proposal to halt the sale of crude oil to local refineries in foreign currency.
The Council approved that the 450,000 barrels of crude oil allocated for domestic consumption be sold in naira to Nigerian refineries, with the Dangote Refinery serving as a pilot project.
The initiative aims to stabilise the pump price of refined fuel and the dollar-naira exchange rate.
It has been noted that the Dangote Refinery currently requires 15 cargoes of crude oil annually. In response to this, the finance minister had earlier inaugurated a technical sub-committee to develop a framework for the sale of crude oil to local refineries in naira.
