Oil marketers and domestic refiners have urged the Federal Government to clarify the specifics of its new naira-for-crude initiative, which officially began on October 1, 2024, according to an announcement by the Federal Ministry of Finance.
In a statement released on Saturday via social media, the ministry confirmed the commencement of crude oil and refined product sales in naira. While the news was met with cautious optimism by key industry bodies such as the Crude Oil Refinery Owners Association of Nigeria (CORAN) and the Petroleum Retail Outlet Owners Association of Nigeria (PETROAN), calls for further disclosure on the deal’s contractual framework and pricing mechanism were immediate.
“The government has not yet provided the details of the agreement, especially around pricing,” said Billy Gillis-Harry, President of PETROAN. He stressed that Nigerians deserved clarity on how the deal might affect fuel prices, adding, “PMS (petrol) pricing is crucial, as it will directly influence the cost of living.”
The Federal Government had previously announced its plan to sell crude oil to Nigerian refineries, including Dangote’s $20 billion Lekki-based refinery, and to facilitate the reciprocal sale of refined products, such as diesel and petrol, all priced in naira. The deal is part of broader efforts to stabilize the naira, reduce pressure on foreign exchange reserves, and streamline the petroleum market.
However, despite the Federal Executive Council’s (FEC) approval of the deal and the October 1st start date, stakeholders remain in the dark about the finer points. Officials at Dangote refinery and the Nigerian National Petroleum Company (NNPC) have remained silent on the operational status, raising questions about the deal’s progress and feasibility.
Industry insiders, including Eche Idoko, Publicity Secretary of CORAN, acknowledged the strategic importance of the initiative for domestic refining but echoed the need for greater transparency. “It’s a welcome development, but we still lack essential details,” Idoko noted.
The Ministry of Finance has stated that consultations with stakeholders, including NNPC executives, top officials from the Dangote Group, and relevant regulatory agencies, are ongoing to ensure the deal’s smooth implementation. Yet, the public awaits more concrete information on the financial and operational terms, which are critical for managing expectations, particularly regarding fuel pricing.
While some celebrate the initiative as a bold move toward financial autonomy in the oil sector, the lack of clarity on key aspects of the deal has left many, including oil marketers, on edge. With fuel prices a sensitive issue in Nigeria, any missteps could have wide-reaching consequences for both the economy and the political landscape.
As the nation watches closely, oil marketers and domestic refiners remain firm in their demand for greater transparency, wary of the potential for market disruptions if details continue to be withheld.
