Naira crude sale yet to happen – Operators

As instructed by President Bola Tinubu, the Dangote Petroleum Refinery and other domestic refineries have not yet begun purchasing crude oil in naira.

It claimed that, contrary to Tinubu's directive from last week, the $20 billion plant and other regional refineries in Nigeria had not yet begun purchasing crude oil in naira from the Nigerian National Petroleum Company Limited.

Individual refiners have written to NNPC asking crude, according to the Crude Oil Refiners Association of Nigeria, but they have not received a response as of yet.

A proposal by Tinubu to sell crude to the Dangote refinery and other future refineries in naira was recently approved by the Federal Executive Council.
The 450,000 barrels intended for domestic use were approved by the FEC to be given to Nigerian refineries in naira, using the Dangote refinery as a pilot. The exchange rate will be fixed for the duration of this transaction.

However, almost one week after the announcement, the refiners said they had not heard from the NNPC.

The Publicity Secretary of the Crude Oil Refiners Association of Nigeria, Eche Idoko, said the Nigerian Midstream and Downstream Petroleum Authority is expected to kickstart the process.
"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.

As usual, Idoko said, "we would expect our regulator—in this case, the NMDPRA—to get things started by arranging a meeting of all parties to talk about the framework for such supply or by having NNPC reply to the various letters that the refineries have sent it asking for crude."
The CORAN spokesperson had earlier claimed that the naira's strength versus the dollar would be enhanced and the cost of petrol would be reduced by the local refineries receiving their crude oil supply in naira.

Idoko thanked Tinubu for paying attention to the concerns raised by native refiners, but pointed out that an executive order ought issued on the new directive.
In order to determine a rate that would benefit the Nigerian market, the crude oil refiners also requested a meeting with the economic team.

"Yes, once the President's directive is put into effect, we will witness a recovery in petrol prices. 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, according to Idoko.

The challenges of obtaining crude oil for their facilities have been a source of grievance for the Dangote refinery and other refineries in the country. The Dangote Group's management recently maintained that the IOCs were still impeding the refinery's ability to provide crude oil to its 650,000-capacity facility.

The group said in a statement that the IOCs insist on supplying crude oil to its refinery through their international agents, claiming that this will drive up local crude prices as the trading arms offer cargoes at prices that are higher than the NUPRC official pricing, $2 to $4 per barrel.

The group further said that when it comes to selling the crude they produce in Nigeria, the foreign oil companies appear to be giving preference to Asian nations.

A top Dangote refinery official, who begged to remain anonymous because he lacked permission to discuss the issue, said that the facility had not yet begun purchasing crude in naira from NNPC.

When our team contacted Olufemi Soneye, the NNPC spokesman, she did not answer any questions about the situation.