ENERGY SUFFICIENCY: NECA Hails the Federal Government and Dangote Refineries for the Landmark Agreement

Following the landmark agreement between the Federal Government and the Dangote refineries on the sale of PMS to NNPC Limited, the Nigeria Employers’ Consultative Association (NECA) commended this landmark agreement as this could signal the end of petrol scarcity and also lead to reduced pressure on FOREX demand.

Speaking in Lagos, the Director-General of NECA, Mr. Adewale-Smatt Oyerinde, hailed the landmark pricing agreement that led to the lifting of petrol from the Dangote refinery. He stated that this singular event has the potential to change the perennial fuel scarcity situation in the county and also reduce the pressure on the Naira. The Director-General noted that while the current pump price is way above the expected price due to the Dollar denominated Crude oil purchase, it is expected that the beginning of the Crude-for-Naira scheme agreed on from 1st October will cause a reduction in general price of the pump price.

Speaking further on the benefits of the recent agreement, the NECA boss averred that “this new direction would not only benefit the Government, it would also have a massive impact on the business community and the Nigerian populace in general. He observed that the measure would moderate the cost of fuels, reduce the long queues at filling stations across the country, and support the energy needs of small businesses”. Mr. Oyerinde also commended the Government’s intention to set up a one-stop shop that would harmonize the interests of all stakeholders, including regulatory and security agencies, to ensure a seamless implementation of the initiative. He stated that such a one-stop-shop would not only enhance the swiftness of approvals for the lifting of refined products but also be cost-effective.

Furthermore, the Director General identified a similar challenge in the local gas market, where the price of gas sold to domestic industries is benchmarked in US-Dollars.  He observed that industries, particularly the manufacturing sector, have suffered significant production setbacks due to limited foreign exchange and instability in the Naira, which has made it difficult to purchase adequate gas for production. He, therefore, urged the Federal Government to take similar steps to benchmark the price of gas in Naira to support local industries, especially the manufacturing sector.