The Nigerian National Petroleum Company Limited may begin the supply of crude oil in naira to the Dangote Petroleum Refinery this week following the announcement by the Federal Government that the naira-for-crude deal has commenced.
Also, following the promise by the government, three more refineries are getting set to start the production of Premium Motor Spirit, otherwise known as petrol, it was gathered on Sunday.
The three refineries include the 11,000 barrels per day capacity Aradel refinery in Rivers State; 20,000-capacity Clairgold refinery in Delta State; and 12,000-capacity Azikel in Bayelsa.
This came as officials at the $20bn Dangote refinery in Lagos and operators of other domestic refineries confirmed on Sunday that though the deal for crude supply in naira has commenced, the commodity is expected to hit the biggest refinery in Africa this week.
On Saturday the Federal Government said it had commenced the sales of crude oil and other refined products in naira.
The Federal Ministry of Finance disclosed this in a post on its X handle.
The statement read, “The Minister of Finance and Coordinating Minister of the Economy announced that, in line with the Federal Executive Council directive, the sale of crude oil and refined petroleum products in naira has officially commenced as of October 1, 2024.
“Following a meeting of the Implementation Committee, chaired by the Minister of Finance on October 3, 2024, to conduct a post-commencement review of the Crude Oil and Refined Products Sales in Naira initiative, the commencement of this strategic initiative was affirmed by key stakeholders.”
Reacting to this on Sunday, officials at the Dangote refinery commended the move by the government and expressed hope that the commodity would arrive the plant this week barring any unforeseen circumstances.
“The deal is still a work in progress and I’m sure that by this week the committee should be done with it,” an impeccable senior source at the plant who spoke to our correspondent in confidence due to lack of authorisation to speak on the matter, stated.
When probed further to confirm if the crude supplied in naira had arrived at the plant, the official insisted that the deal “is a work in progress, adding that “nobody will say crude has arrived anywhere now.”
The source continued, “As of Friday, discussions about it were still ongoing. But I’m sure there will be a complete picture by this week. However, the whole thing is okay. It is a good signal about the crude oil supply in naira.
“And I can assure you that once the first cargo delivers the crude, I’ll send you a picture of it so that you’ll confirm that the deal has been completed. It is also for record purposes.
You should have documents and photographs to show the first supply for such deals, having dates and possibly time of arrival.”
Another source at the plant stated that the naira-for-crude deal would last for six months under the first phase.
“The deal is for six months in the first instance. People shouldn’t think it is forever. This is a dollar-based business, so supplying it in naira though at the equivalent dollar rate is significant. The President should be commended for this.
“Otherwise, the local crude would have been purchased from foreign-based traders who often mark up their prices and this has its effect on the cost of producing refined commodities whether in Nigeria or elsewhere,” the official stated.
Earlier, the Crude Oil Refinery Owners Association of Nigeria and the Petroleum Retail Outlet Owners Association of Nigeria welcomed the announcement of the government on the commencement of the naira-for-crude deal.
They, however, asked the government to provide details about the deal.
“The details of this agreement is not known yet but we hope that the intricacies will be revealed to the public because this business is the central value of everything that happen in our economy. PMS is key and the pricing of the crude is important as it determines the price of the commodity.
“It will be a great thing for us to know the details and its implementation. However, we are happy with the deal and congratulate everyone involved,” the President of PETROAN, Billy Gillis-Harry, had stated.
Last month, the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency announced that the Federal Executive Council under the leadership of President Bola Tinubu had approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira.