The Nigerian government is set to reconvene a crucial meeting on Monday to discuss the future of the Naira-for-crude arrangement with Dangote Refinery. The meeting comes amid uncertainty over petroleum product prices, following Dangote Refinery’s recent decision to suspend fuel sales in Naira.
Government officials from the Ministries of Petroleum Resources and Finance, who spoke on condition of anonymity, noted that the discussions will focus on whether the deal can continue despite ongoing challenges.
The suspension of Naira transactions by Dangote Refinery has raised concerns over a possible deadlock between the Nigerian National Petroleum Company Limited (NNPCL) and the refinery regarding the crude supply agreement. However, sources familiar with the matter have suggested that the government is still keen on keeping the deal alive.
One key challenge in the agreement is the availability of crude oil. Reports indicate that NNPCL has already committed large volumes of crude to foreign creditors as part of its crude-backed loan agreements. This situation has limited the amount of crude available for local refining under the Naira-for-crude arrangement.
“The scheme won’t end. The challenging point is the issue of crude availability, with NNPC claiming it has pre-sold large volumes of crude. The committee agreed to reconvene on Monday (next week) to review options that the Nigeria Upstream Petroleum Regulatory Commission has been mandated to come up with. The committee is trying to dimension solution options,” a government official stated.
Last week, a similar meeting was held at the Ministry of Finance headquarters in Abuja to review developments and reaffirm commitment to the policy. The session was attended by key stakeholders, including the Minister of Finance and Coordinating Minister of the Economy, Wale Edun (who joined virtually), the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, and other top officials from relevant regulatory bodies.
In response to the latest developments, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, noted that fuel marketers are prepared for any outcome.
“The market is making preparations for any surprises. So, if there are surprises, we’ll have alternatives to go to,” he said.
Similarly, the President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, urged the government to step in and ensure the continuity of the Naira-for-crude policy.
“I would like to advise the FG to look into the agreement with Dangote again to maintain the tempo of the prices of petroleum products,” he said.
