…stakeholders hail the decision of FG on crude sales in Naira
…Dangote Refinery and others must sell refined products to oil marketers and distributors in naira and not in US dollars.
Stakeholders have hailed the government’s decision to ask the Nigerian National Petroleum Company Limited to sell crude oil to Dangote Refinery and other refineries in local currency, the Naira.
According to them, this action will reduce a lot of stumbling blocks put in the way of both consumers and marketers when it comes to procurement of the product and its distribution.
The directive to sell crude oil to Dangote Refinery in Naira and not in dollars according to them has the following implications
Reduced strain on foreign exchange: The move is expected to ease the strain on Nigeria’s foreign exchange reserves, as the country will no longer need to spend dollars to import refined fuel.
Stabilization of pump prices: The directive is expected to stabilize the pump price of refined fuel, as the cost of importing fuel will be reduced.
Boost to local production: The move is expected to boost local production of refined petroleum products, as Dangote Refinery and other local refineries will have access to crude oil at a lower cost.
Savings for the country: The country is expected to save billions of dollars annually, as it will no longer need to spend dollars to import refined fuel.
Strengthening of the Naira: The move is expected to strengthen the Naira, as the demand for dollars will reduce.
Increased government revenue: The move is expected to increase government revenue, as the country will save money on fuel imports and increase its earnings from selling crude oil to local refineries.
Job creation: The move is expected to create jobs, as local refineries will increase production and employ more people.
Reduced dependence on imports: The move is expected to reduce Nigeria’s dependence on imported fuel, as local refineries will increase their production to meet domestic demand.
The Federal Executive Council (FEC) on Monday directed the Nigerian National Petroleum Company (NNPC) Limited to sell crude oil to Dangote Refinery and other local refineries in naira and not in United States greenback.
Federal Inland Revenue Service (FIRS) boss Zack Adedeji disclosed after an FEC meeting chaired by President Bola Tinubu in Abuja on Monday.
Adedeji said FEC ordered that the state-owned NNPCL immediately begin the full implementation of the directive to boost local production of refined petroleum products in Nigeria.
The revenue boss also said the Tinubu administration ordered that the sale of refined products from Dangote Refinery to oil marketers and distributors be denominated in naira and not in US dollars.
Aliko Dangote, owner of Dangote Refinery, had accused the authorities and International Oil Companies of frustrating crude supply to his $20bn facility sited at the Lekki Free Trade Zone near Lagos.
Regulatory authorities would later questioned the quality of petroleum products produced at the Dangote Refinery but the billionaire businessman insisted that the quality of products at his refinery surpassed the ones imported by marketers.
Dangote commenced operations at his behemoth facility located in Lagos last December with 350,000 barrels a day. The refinery hopes to achieve its full capacity of 650,000 barrels per day by the end of the year.
The refinery has begun the supply of diesel and aviation fuel to marketers in the country while petrol supply is expected to commence in August amid regulatory resistance.
