Crude Oil Sales in Naira to Local Refineries, Including Dangote, Begin October 1, Finance Minister

The Federal Government has announced that starting October 1, 2024, crude oil will be sold to Dangote Refinery and other local refineries in naira. This was revealed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a meeting with the Implementation Committee in Abuja on Monday.

The Ministry of Finance shared the update on its official X (formerly Twitter) page, stating that the meeting was held to assess progress on key initiatives. The meeting also outlined the roles of various stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Central Bank of Nigeria, Nigerian Upstream Petroleum Regulatory Commission, and the African Export-Import Bank, to ensure a smooth transition to naira payments.

The announcement included a report from the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, who noted that the first Premium Motor Spirit (PMS) delivery from the Dangote Refinery is expected next month, under existing agreements. Updates on the Port Harcourt and Dangote Refineries were also provided, with significant production increases anticipated from November 2024.

Minister Edun emphasized the importance of transparency in this process and directed the Technical Sub-Committee to finalize the details and prepare a report for the President, ensuring that the transition plan is on schedule for implementation starting in September.

It’s worth recalling that on July 29, the Federal Executive Council approved President Tinubu’s proposal for the Nigerian National Petroleum Company (NNPC) to stop selling crude oil to local refineries in foreign currency. Instead, the 450,000 barrels allocated for domestic consumption will be offered in naira, beginning with the Dangote Refinery as a pilot. This move aims to stabilize fuel pump prices and the dollar-naira exchange rate.

Currently, the Dangote Refinery requires 15 cargoes of crude oil annually. The Finance Minister had previously inaugurated a technical sub-committee to develop a framework for selling crude oil to local refineries in naira. Monday’s meeting was the second within a week to advance this initiative.

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