Oil and gas suppliers in Nigeria have endorsed the federal government’s decision to sell crude oil in Naira to local refineries, while urging the refineries to reciprocate by selling refined products to distributors in Naira to help stabilize the market.
Benneth Korie, President of the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), stressed the need for inclusive distribution of refined products and called for the swift reopening of the Port Harcourt refinery. This move, he noted, would stabilize fuel prices, boost local refining capacity, reduce import dependency, and tackle smuggling in the industry.
Last month, the Federal Executive Council approved President Bola Tinubu’s proposal to sell crude oil to local refineries, including Dangote Refinery, in Naira. Dangote Refinery requires 15 shipments of crude annually, costing $13.5 billion, with the Nigerian National Petroleum Corporation (NNPC) Ltd committing to supply four of these shipments. Additionally, the government has earmarked 450,000 barrels of crude for local consumption, to be sold in Naira to Nigerian refineries, with Dangote serving as the initial test case. A fixed exchange rate will be maintained throughout the transaction.
Korie praised Aliko Dangote’s contributions to Nigeria’s oil industry through the establishment of the largest refinery in the country and called for the refinery’s products to be distributed to a wider range of stakeholders, including NNPC Trading, NNPC Retail, and other key market players such as DAPPMAN, MOMAN, IPMAN, PETROAN, and NOGASA. This, he said, would ensure equitable distribution across the country.
He further called for the federal government to fast-track the September reopening of the Port Harcourt refinery to alleviate fuel shortages and ensure that refined products are evenly distributed among all industry players.
Korie also voiced his support for the government’s directive to sell crude oil in Naira, expressing hope that refineries would follow suit by selling refined products in Naira, thus contributing to market stability.
Addressing the issue of smuggling, Korie advocated for a redesign of distribution channels and called for the reinforcement of security agencies, particularly at border points, with necessary equipment and logistics, such as drones, to combat smuggling and fuel theft.
Regarding inflation and economic stability, Korie urged the government to prioritize agriculture by increasing budget allocations and providing subsidies for agricultural inputs and equipment. He emphasized the need to make farming more attractive, noting that reliance on palliatives is unsustainable. He also called for improvements in transportation infrastructure, including road networks and railways, to enhance logistics and reduce costs.
Korie addressed concerns over the prices of Automated Gas Oil (AGO), predicting that with the operation of Dangote Refinery and crude oil transactions in Naira, there would be a reduction in AGO prices, which could, in turn, lower transportation costs and market prices. He also urged NNPC to leverage its shares in Dangote Refinery to help drive down these costs.
He commended the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for their efforts in regulating the industry and called on them to ensure fair pricing of products to prevent profiteering.
Finally, Korie encouraged the government to facilitate the availability of Compressed Natural Gas (CNG) kits and conversion centers, adding that marketers are prepared to offer their stations for this purpose to reduce reliance on Premium Motor Spirit (PMS) and AGO.
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