The Federal Government has confirmed that the Naira-for-Crude deal between NNPC Limited and Dangote Refinery remains intact and has not been canceled.
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Speaking in Abuja during a meeting with the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, clarified that the agreement, approved by the Federal Executive Council (FEC), is still in effect.
Lokpobiri stated that while NNPC operates a private-sector model, the government still has limited control over major decisions, adding that operators in the oil and gas industry are free to transact business in any currency.
According to him, “The government is not canceling it. What was taken to the council was a pilot scheme where they said NNPC should be selling crude in Naira to Dangote Refinery. We’ve always encouraged people to buy crude in whatever currency. Even if you buy in Naira, it’s going to be at the prevailing exchange rate. I also know that people have been buying crude to refine in their respective local refineries in Naira.
“The dispute has always been about what the exchange rate is, which the government is not involved in. It is purely a private-sector issue. If you are in the upstream and you have a modular refinery next to you, and the person wants to buy crude, it’s between the two of you to negotiate and agree on the price. The person may decide to pay you either in dollars or Naira.
“We’ve always done that. So it is not true that the scheme is canceled. Not at all. That one that was taken to the FEC was a scheme specifically for Dangote Refinery, and they said others will also follow. That is why it didn’t include the crude-for-Naira from IOCs and other operators. It was basically only NNPC.
“But that doesn’t mean that Dangote doesn’t buy crude from other operators. They do. But that Naira-for-crude scheme was essentially between NNPC and Dangote Refinery.”
The Minister explained that in order for NNPC to operate and compete with other national oil companies across the globe, the Petroleum Industry Act made NNPC a private-sector-driven company so that the country can maximize the opportunities in the industry.
“And so, NNPC takes decisions that they feel are best for Nigeria in the industry with limited government interference. That doesn’t mean that we can’t call them to order from time to time because they are a national oil company.
“But the point I’m making here is that NNPC has a measure of independence now so that they can make proper business decisions that will be best for Nigerians,” he explained.
He expressed the government’s commitment to continue supporting the downstream sector, pointing out that there are more opportunities in the downstream than in the upstream sector.
He urged the retailers to open Compressed Natural Gas (CNG) points in their outlets because the government views gas as the country’s transition fuel.
Earlier, PETROAN President, Mr. Billy Gillis-Harry, expressed the group’s support for the Naira-for-Crude policy, noting that it has helped to reduce the cost of petrol.
Gillis-Harry added that while the group fully supports the local refining of crude oil, it urged the government not to place restrictions on petrol importation.
He argued that petrol importation has ensured that local refineries maintain export parity prices, with consumers benefiting from the competition between imported and locally refined products.
“And also, importation of products should no longer be ruled out because we want to be able to compete favorably in a fully liberalized economy where every source of petroleum product is allowed. We, as the most critical downstream grassroots participants in the industry, should be able to tell you, sir, when one product is very good and when one product is affordable and how it can work.
“So we want to advocate that refineries should work, and importation should also be considered as one of our sources of obtaining products. This will drive healthy competition and guarantee that our domestic prices will not be above import parity, thereby ensuring the best possible, affordable product with the sustainability of petroleum products,” he stated.
He commended Lokpobiri for the achievements recorded in the oil sector since he became Minister in 2023, including improvements in oil production, reductions in oil theft, and the coming online of local refineries.
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