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Crude-for-naira scheme will reduce forex pressure, ensure fuel availability – NECA - BUSINESSDAY
…Urges similar scheme for local gas market
Petroleum Company Limited (NNPCL) and the Dangote refinery, with the Nigerian Employers Consultative Association (NECA), saying that the planned commencement of Crude-for-Naira from October 1, will reduce the current foreign pressure, and ensure product availability to the local market.
“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. 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”, Adewale Smatt-Oyerinde, the director-general of NECA said in Lagos on Monday.
According to Oyerinde, while the current pump price is way above the expected price due to the dollar-denominated crude oil purchase, it is expected that the commencement of the crude-for-naira scheme agreed on from October 1 will cause a reduction in the general price of the pump price.
Oyerinde welcomed the Federal Government’s intention to set up a one-stop shop that would harmonise 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.
Oyerinde, however, 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.
The NNPCL confirmed in a statement by Olufemi Soneye, its spokesperson, that the sales of petrol in naira by the Dangote refinery will begin from October 1, 2024.
According to the NNPCL, the current distribution of petrol from the Dangote refinery was priced in dollars as crude oil was supplied to the firm before the naira agreement was reached.
It stated, “The NNPC Ltd can confirm that it is paying Dangote Refinery in USD for September 2024 PMS offtake, as naira transactions will only commence on October 1, 2024.”
The Federal Government has already set up a technical committee to work out the mechanism of the naira transaction of products from the Dangote refinery to the NNPCL.
