Nigerian government begins selling crude oil in naira

The Nigerian government announced on Saturday that it has officially started selling crude oil and refined petroleum products in naira.

The sale in naira will take effect from October 1, the Federal Ministry of Finance said in a statement released on its X-Handle on Saturday.

“The Honorable Minister of Finance and Coordinating Minister for Economic Affairs announced that in line with the directive of the Federal Executive Council (FEC), the sale of crude oil and refined petroleum products in Naira has officially commenced from October 1, 2024,” the statement said.

It noted that following a meeting of the Implementation Committee chaired by the Minister of Finance and Coordinating Minister for Economic Affairs, Wale Edun, on October 3, to conduct a retrospective review of the “Sales of Crude Oil and Refined Products in Naira” initiative, The Commencement This strategic initiative has been endorsed by key stakeholders.

The meeting was attended by the Minister of State for Petroleum (Oil), Special Adviser to the President on Revenue, Special Adviser to the President on Energy and the Managing Director of the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), according to the statement.

The others include the representative of the Chairman of Dangote Group, Vice President of Dangote Group and the management of the Nigerian National Petroleum Company (NNPC) led by the Group Chief Executive Officer (GCEO), Chief Financial Officer (CFO) and Executive Vice President (downstream).

background

Recently, the Dangote Group and Nigerian petroleum regulators became embroiled in a dispute over control of the downstream petroleum market.

In June, the Dangote Group accused several international oil companies of undermining the facility's operations by either withholding crude oil or supplying it at premiums that were inflated compared to market prices.

In addition, there were conflicts with Nigerian energy regulators, including the Nigerian Midstream and Downstream Regulatory Authority, which claimed that diesel from the refinery had sulfur levels above the permissible limit. Regulators also accused Dangote of trying to create a monopoly.

In response, Mr Dangote invited MPs who visited the refinery to an on-site laboratory where diesel from the refinery was tested using two imported samples. The results showed that the refinery's diesel had significantly lower sulfur content than imported alternatives.

In July, the Federal Executive Council (FEC) decided directed the Nigerian National Petroleum Company Limited (NNPC Ltd) to work with the Dangote Refinery and other local refineries to resolve the dispute over crude oil sales to these facilities.

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Chaired by President Bola Tinubu, the FEC also ordered that crude oil sales to refineries should be made in Naira and that refineries in Nigeria should also sell their refined products in Naira in the domestic market.