In a move to bolster Nigeria’s oil industry, President Bola Tinubu recently directed that crude oil sales to domestic refineries, including the $20 billion Dangote Petroleum Refinery, be conducted in naira. However, the implementation of this directive remains pending, with refiners still awaiting a response from the Nigerian National Petroleum Company Limited (NNPC).
Despite the Federal Executive Council’s (FEC) approval of the proposal to sell crude in naira, individual refiners have yet to receive a response from NNPC. The Crude Oil Refiners Association of Nigeria (CORAN) confirmed that its members have sent multiple petitions to the NNPC without any reply.
According to Eche Idoko, the Publicity Secretary of the Nigerian Crude Oil Refiners Association, stated, “We haven’t begun purchasing crude from NNPC. They (NNPC) have already received letters from individual members, and these refineries have made multiple petitions before them.” He emphasized the need for the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to initiate the process by organizing meetings to discuss the framework for this new supply method.
An earlier statement from Idoko suggested that the naira’s appreciation against the dollar and lower gasoline prices could result from local refineries receiving crude in naira. Idoko praised President Tinubu for considering indigenous refiners’ voices but urged him to issue an executive order to enforce the new policy.
“Certainly, after the President’s decree is put into effect, petrol prices will rise again. However, the declaration on its own is insufficient. To ensure that the producers of crude are compelled to sell to us in naira, it must be enforced by legislation, either through an executive order or by putting it into a new regulation,” Idoko added.
The Dangote Group also highlighted ongoing challenges in obtaining crude oil for their 650,000-capacity refinery. The group accused international oil companies (IOCs) of preferring to supply crude through their international agents, which could inflate local crude prices. The group claimed that IOCs favor selling crude to Asian markets, further complicating local supply dynamics.
A senior official at the Dangote refinery, who requested anonymity, confirmed that the facility had not yet started purchasing crude in naira from NNPC.
The refining industry remains hopeful that the President’s directive will soon be operationalized, leading to a more stable and favorable economic environment for local refineries.
