FG to Begin Naira Crude Oil Sales to Dangote Refinery on October 1

The Federal Government is set to commence crude oil sales to the Dangote Refinery in naira from October 1, 2024, as per recent updates from the Ministry of Finance. This move aligns with the Presidential Directive on Crude Oil Sales in Naira, aimed at bolstering Nigeria’s economic growth and development.

During a critical meeting of the Federal Government’s Implementation Committee on Crude Oil Sales in Naira, chaired by Wale Edun, Minister of Finance and Coordinating Minister of the Economy, the decision was finalized. The meeting, held in Abuja on Monday, focused on reviewing progress on various initiatives, including the upcoming naira-denominated crude oil transactions with the Dangote Refinery.

According to a statement issued by the finance ministry and signed by Mohammed Manga, Director of Information and Public Relations, the implementation of naira payments for crude oil sales to Dangote will commence on October 1, marking a key milestone in Nigeria’s economic transformation. The finance minister stressed the importance of transparency in the process and tasked the Technical Sub-Committee to finalize the necessary details and submit a report to the President, ensuring that all directives are on track for implementation by September.

Wale Edun expressed confidence that collaboration among stakeholders, including regulatory bodies and financial institutions, would ensure a transparent and efficient transition to crude oil sales in naira. At the meeting, Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS) and the Technical Sub-Committee, reported that the first PMS delivery from the Dangote Refinery is expected next month, under existing agreements.

Key stakeholders such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Central Bank of Nigeria (CBN), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the African Export-Import Bank (Afreximbank) were assigned crucial roles to ensure smooth implementation.

Additionally, updates on the Port Harcourt and Dangote refineries were provided, indicating a significant production increase expected by November 2024.

In another development, President Bola Tinubu has authorized the Nigerian National Petroleum Company (NNPC) Limited to use its 2023 final dividends owed to the federation to offset the cost of petrol subsidies. The President also approved the suspension of 2024 interim dividend payments to the federation to improve NNPC’s cash flow.

The NNPC informed the President that due to subsidy payments, it is currently unable to pay taxes and royalties into the federation account, referring to the issue as a ‘subsidy shortfall/FX differential.’ A forecast from NNPC, obtained by BusinessDay, estimated that petrol subsidy expenses from August 2023 to December 2024 will total N6.884 trillion, leaving the company unable to remit N3.987 trillion in taxes and royalties to the federation account. The specific dividend amounts withheld or delayed were not confirmed at the time of reporting.