FG begins sale of crude in naira to Dangote refinery
The Federal Government has begun the sale of crude oil to local refineries, with transactions conducted in Naira in significant development aimed at relieving pressure on the Naira, lowering transaction costs, and increasing the availability of petroleum products.Mr. Wale Edun, the Honourable Minister of Finance and Coordinating Minister of the Economy, announced the breakthrough on Friday in Abuja after a Technical Sub-Committee meeting on the subject.
Bayo Onanuga, President Tinubu's Special Adviser on Information and Strategy, disclosed this via his X account.
This is a significant step toward streamlining the petroleum sector and boosting the local economy.
Edun, represented by the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, announced the completion of all agreements and modalities for the implementation of the Federal Executive Council's approval on the sale of crude to local refineries in Naira and the corresponding purchase of petroleum products in Naira.
"Recall that the FEC, led by Mr. President, approved the sale of crude to local refineries in Naira, as well as the purchase of petroleum products in the same currency.
"This initiative will help to reduce pressure on the Naira, eliminate unnecessary transaction costs, and improve availability of petroleum products in the country. Since then, the implementation committee, chaired by the Hon Minister of Finance, and the technical committee have worked closely with NNPCL and Dangote Refinery to finalize the modalities for implementing the FEC approval.
"I am pleased to announce that all agreements have been completed, and the loading of the first batch of PMS from the Dangote Refinery will begin on Sunday, September 15th. From October 1st, NNPC will begin supplying approximately 385kbpd of crude oil to the Dangote Refinery for payment in Naira; in exchange, the Dangote Refinery will supply PMS and diesel of equal value to the domestic market for payment in Naira.
"Diesel will be sold in Naira by the Dangote Refinery to any interested offtaker," according to the minister.
As previously reported, the Nigerian National Petroleum Company Limited and Dangote Petroleum Refinery were finalizing negotiations for the sale of crude oil from NNPC to the Dangote refinery in Naira, as well as the buy-back of refined petroleum products from the $20 billion plant in Naira.
The parties involved may conclude their discussions the following week.
Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, made the announcement on Thursday during a space session hosted by Nairametrics on X.
According to Edwin, the NNPC demanded to oversee the production of refined products at the Dangote refinery because the national oil company would supply crude to the plant.
He stated, "We are still in discussions with the government about receiving the crude in naira. The discussions have been ongoing. It has not yet been completed. When we buy crude from them in naira, they will return the products to us in naira, and that is where we stand. We are still in discussion.
"So, whatever we produce, they will buy back from us. In fact, NNPC has informed us that they will have a team of six to ten people permanently stationed inside our refinery. They even suggested that we give them office space because they were going to give the crude.
"They'll monitor production and then buy it back in naira. So here we are, awaiting the conclusion of the discussions. Hopefully, we'll be able to start next week if everything is completed."
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