With Naira-for-Crude, Tinubu Promises More Stability 

·    Dangote: Our refinery has over 500m litres of fuel in reserve

·    Again, national oil company raises pump price of petrol

Deji Elumoye and Emmanuel Addeh in Abuja

President Bola Tinubu yesterday said with the current Naira-based sale of crude oil and refined products, there will be some level of stability in the downstream sector.

Tinubu, who spoke during a review meeting of the technical committee on implementation of the new arrangement at State House, Abuja, urged members of the committee to resolve any teething problems.

He said the naira transactions were conceived to remove the exchange rate hurdle, stressing that his administration is determined to do away with decisions that are not progressive.

The president stated, “Whatever solution we proffer in crude oil and refined products sales in Naira should not take us back to our experience in the last 40 years. There can be cost and revenue adjustment in the oil sector, but the issue is that the government will not have to go back to the old way of doing things.”

Tinubu said the various players in the oil sector, including the Nigerian National Petroleum Corporation Limited (NNPC) and Dangote refinery, should work to improve the economy and the livelihoods of Nigerians.

He urged stakeholders to look inward and consider supplying enough petrol and petroleum products for local consumption to stop the persistent reliance on importation. He said this would enable the channelling of foreign exchange to development of the real sector.

The president advised stakeholders to partner Afreximbank as a settlement bank to resolve the naira pricing for crude and refined products.

Afreximbank is already on board as the financial adviser.

He added, “The market must determine what we are doing. Once you allow the market to determine the profit and loss, independent marketers and the government side can meet on the worksheet. I want the issues resolved without future waste of time.

“We can have energy security, and the motivation for Alhaji Aliko Dangote will not be defeated. It will be more predictable on a medium and long-term basis.”

Earlier, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the administration’s ground-breaking steps to sell crude in Naira will not be reversed. Edun said the government will not be involved in determining the rate of exchange for the oil sector.

President and Chief Executive of Dangote Group, Aliko Dangote, told the president that his refinery had more than 500 million litres of fuel in reserve after supplying 400 million litres to the domestic market.

Dangote said the refinery could collaborate with the other refineries managed by NNPC  to meet an estimated 32 million litres of local petrol needs.

At the meeting, Chairman of Federal Inland Revenue Service (FIRS), Zach Adedeji, who chairs the technical committee, said importing refined products should end once Nigeria developed the capacity to produce enough to meet domestic need.

“The vision of Mr President is to turn Nigeria into a hub for refined products to export to the world,” Adedeji explained.

Other stakeholders at the meeting included President and Chairman of the Board of AfreximBank, Professor Benedict Oramah; Minister of Budget and National Planning, Senator Abubakar Bagudu; and Group Managing Director of NNPC, Mele Kyari.

Special Adviser to the President on Energy, Olu Verheijen, and chief executives of the Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Ports Authority (NPA) also attended the meeting, along with the chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, and Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed.

Speaking with newsmen after the meeting, Dangote urged NNPC and other petroleum marketers to desist from importation of Premium Motor Spirit (PMS), otherwise known as petrol.

According to him, Dangote refinery currently has over 500 million litres of petrol stocked up in its tanks, awaiting evacuation by buyers. He said the stock, given the rate of current local fuel consumption, can last the country 12 days even with zero importation.

On why petrol scarcity had persisted despite his boast of huge stranded product stock, Dangote said his company was not involved in retailing and could, therefore, not do much to help in that regard.

He urged retailers to come forward and buy the available product rather than resort to importation. He also expressed his company’s capacity and readiness to continue to satisfy local demand for fuel as long as NNPC fulfilled its obligation of selling crude to them.

Addressing concerns over fuel scarcity in several parts of the country, Dangote said, “Well, on the streets, one thing that you have to understand is that we are producers. I have a refinery. I’m not in the business of retail. If I’m in the business of retail, then you hold me responsible.

“But what I’m saying is that the retailers should, please, come forward and pick. If they don’t come forward and pick, what do you want me to do? There’s nothing that I can do.

“So I am expecting either NNPC or the marketers to stop importing; they should come and pick because we have what they need. And you know, as they move, I will be pumping.

“I don’t know whether you understand what it takes to have half a billion litres of petrol inside our tank. It’s costing me money every day. If I will be able to collect the naira, I can actually charge somebody 32 per cent in interest. So right now, that’s what I’m losing.

“And you are talking about 500 million litres. We don’t print money. But the issue is that if they come and collect, then you will not see any queues in the filling stations.”

Dangote flayed the continued importation of petrol, saying his refinery is capable of supplying the Nigerian market 30 million litres.

“I’m also putting my own name on the line by giving Mr President my word that, yes, we will be able to supply the market minimum 30 million per day, and we’ll be ramping up. So we’re ready. We’re more than ready.”

He assured that with enough supply of crude, his refinery had the capacity to produce more than 30 million litres per day.

Dangote further disclosed that the meeting was successful with assurance of enough Naira to crude to satisfy the market and strengthen the initiative.

He stated, “I think we’ve had a very, very good meeting, where now, yes, we will use a market determined exchange rate and also the crude price. With that, Mr. President also directed that, yes, NNPC will buy.

“Marketers will also buy. They will be buying just like any other, that is NNPC retail at the end of the day, we have also Afreximbank, which I think they are now going to be the in-between.”

Briefing newsmen, also, Edun shared insights from the meeting with Tinubu regarding the implementation of the initiative to sell crude oil to local refiners in Naira.

He said the initiative received full endorsement from the Federal Executive Council (FEC), with the aim of stabilising the petroleum market and enhancing local production capabilities.

Edun stated, “We had a session with Mr. President to review the implementation of this bold initiative. It allows local refiners to purchase crude oil and sell their products in Naira to the Nigerian public.”

He applauded Dangote Group’s substantial investment in a refinery with the capacity of 650,000 barrels per day as a key enabler of the initiative.

Edun emphasised that the implementation committee had been working diligently with various stakeholders, including regulatory bodies, such as NMDPRA and NNPC, to ensure the initiative’s success.

He said, “What we have achieved is the establishment of market pricing for petroleum products. This, coupled with market pricing for foreign exchange, sets our economy on a path toward industrialisation.”

Edun highlighted the broader economic implications of the initiative, stating that it would provide essential raw materials, not only for agriculture, but also for industries, such as chemicals, textiles, and building materials.

“This is part of Mr. President’s strategy to create favourable conditions for private sector investment, job creation, and economic growth,” he explained.

Meanwhile, for the umpteenth time yesterday, NNPC raised the pump price of petrol, especially in Lagos and Abuja.

It was the third price hike in less than two months, as the pump price in Lagos rose from N998 per litre to N1,025 and in Abuja from N1,030 to N1,060 per litre.

Outlets in Lagos and Abuja immediately effected the increase, as Nigerians faced the harsh effect of the removal of subsidy and the operation of a fully deregulated downstream environment.

Amid the increase yesterday, fuel queues persisted in Abuja, as the NNPC mega filling station in Zone 1 was besieged by motorists, while many private filling stations sold for over N1,200 per litre.