Naira Crude Sales Yet to Commence, Say Refinery Operators

Domestic refineries, including the Dangote Petroleum Refinery, have not begun purchasing crude oil in naira as directed by President Bola Tinubu. The $20 billion Dangote plant and other local refineries in Nigeria have not received crude oil from the Nigerian National Petroleum Company Limited (NNPC) in naira, despite the President’s directive issued last week.

The Crude Oil Refiners Association of Nigeria (CORAN) has indicated that individual refiners have written to the NNPC requesting crude but have yet to receive a response.

The Federal Executive Council (FEC) recently approved President Tinubu’s proposal to sell crude to domestic refineries in naira, starting with the Dangote refinery. This initiative includes a fixed exchange rate for the duration of the transaction, covering 450,000 barrels designated for domestic consumption.

However, nearly a week after this announcement, refiners report no communication from the NNPC. Eche Idoko, the Publicity Secretary of CORAN, highlighted the lack of action from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to facilitate this process.

“We have not started buying crude from NNPC. Individual members have written to them already, and they have several requests from these refineries before them. Typically, we would expect our regulator, in this instance, the NMDPRA, to kickstart the process by calling for a meeting of all parties to discuss the framework for such supply or have NNPC respond to the various letters to it by the refineries requesting for crude,” Idoko noted.

Idoko praised President Tinubu for considering indigenous refiners’ needs but emphasized the need for an executive order to enforce the new directive. He also called for a meeting with the economic team to establish a favorable rate for the Nigerian market.

The Dangote Group has previously reported difficulties in accessing crude oil, alleging that International Oil Companies (IOCs) are hindering supply by prioritizing sales through foreign agents at prices above the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) official rate. The group also claimed that IOCs prioritize Asian markets for their Nigerian crude.

An anonymous senior official at the Dangote refinery confirmed that the plant has not yet started purchasing crude in naira from the NNPC. NNPC spokesperson Olufemi Soneye did not respond to inquiries on the matter.