The Nigerian National Petroleum Company Limited (NNPC) is set to commence the supply of crude oil in naira to the Dangote Petroleum Refinery this week, as part of the Federal Government’s naira-for-crude deal, which officially began on October 1, 2024. This development also paves the way for three additional refineries to begin the production of Premium Motor Spirit (PMS), commonly known as petrol.
These refineries include Aradel in Rivers State (11,000 barrels per day), Clairgold in Delta State (20,000 barrels per day), and Azikel in Bayelsa (12,000 barrels per day). The refineries are preparing for PMS production following the government’s commitment to supply crude oil in naira.
On Saturday, the Federal Ministry of Finance confirmed the launch of the naira-for-crude initiative, which aims to reduce pressure on the naira and enhance the availability of petroleum products domestically. The ministry announced the plan via a post on its X (formerly Twitter) handle, stating that the Federal Executive Council had approved the sale of crude oil and refined products in naira as of October 1, 2024.
Officials at the Dangote refinery expressed optimism that the first batch of crude oil would arrive at the facility this week, signaling the start of a six-month phase of the naira-for-crude deal. A senior official at the Dangote refinery confirmed that discussions were ongoing, with expectations that the first cargo would be delivered soon.
In addition to the Dangote refinery, modular refineries like Aradel, Clairgold, and Azikel are eager to transition from producing diesel and kerosene to producing petrol, thanks to the government’s crude supply initiative. This move is seen as crucial to reducing Nigeria’s dependence on imported fuel and stabilizing local fuel prices.
The Crude Oil Refinery Owners Association of Nigeria and the Petroleum Retail Outlet Owners Association of Nigeria have both welcomed the initiative, although they call for further clarification on the details of the agreement, particularly the pricing of crude oil in naira.
In a separate development, the NNPC revealed that it had lifted 102.9 million liters of petrol from the Dangote refinery between September 15 and 30, 2024. This marks the beginning of efforts to enhance fuel availability and alleviate transportation challenges across the country. The supply, however, fell short of the planned 400 million liters for the period, representing a 25.74% transaction performance.
As local refineries ramp up operations and the naira-for-crude deal progresses, industry stakeholders remain optimistic about the potential impact on Nigeria’s fuel market, particularly in ending petrol importation and stabilizing fuel prices for consumers across the country.
