The federal government of Nigeria has initiated a landmark transaction, facilitating the sale of crude oil to local refineries and the corresponding purchase of petroleum products in Naira.
This strategic move aims to alleviate pressure on the Naira, eliminate unnecessary transaction costs, and enhance the availability of petroleum products across the nation.
The announcement was made by Mr. Wale Edun, the Honourable Minister of Finance and Coordinating Minister of the Economy, during a briefing in Abuja. Represented by Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), the Minister detailed the completion of agreements and modalities for the Federal Executive Council (FEC) approved initiative.
“Recall that the FEC under the leadership of Mr. President approved the sale of crude to local refineries in Naira and corresponding purchase of petroleum products in Naira,” stated Dr. Adedeji.
“This initiative will help reduce pressure on the Naira, eliminate unnecessary transaction costs, and improve availability of petroleum products in the country.”
The implementation committee, led by the Minister of Finance, along with the technical committee, has collaborated with NNPCL and Dangote Refinery to finalize the details. Starting on Sunday, September 15th, the first batch of Premium Motor Spirit (PMS) from the Dangote Refinery will be loaded. From October 1st, NNPC will supply approximately 385,000 barrels per day of crude oil to the Dangote Refinery, to be paid for in Naira. In exchange, the refinery will provide PMS and diesel of equivalent value to the domestic market, also to be paid for in Naira.
Diesel will be available for sale in Naira to any interested offtaker, while PMS will initially be sold exclusively to NNPC, who will then distribute it to various marketers. Additionally, all related regulatory costs will be settled in Naira.
To ensure seamless implementation, a one-stop shop is being established in Lagos to coordinate service provision from regulatory and security agencies and other stakeholders.
The Minister expressed gratitude for the dedication and patriotism shown by all involved in this initiative and extended heartfelt thanks to the President for championing this innovative approach. “We would sincerely like to thank Mr. President for championing this novel initiative and would like to assure Mr. President that he can count on us to implement his vision,” he affirmed.
This initiative signifies a pivotal moment in Nigeria’s pursuit of economic growth and energy independence.
