Market News

Those within Nigeria’s petroleum sector who are working in the interest of Western international monopoly capital to foil the naira-for-petroleum deal President Bola Tinubu offered domestic petroleum refiners should be fished out of the system really quickly.

And they are not all too difficult to identify.

Someone, whose name does not readily come to mind now, is quoted to have said that Nigeria’s political elite, equivalents of fifth columnists, are no more than custodians of Nigeria’s wealth on behalf of foreign interests.

No sooner had President Tinubu given the naira-for-petroleum directive to Nigeria National Petroleum Company Limited than some of those unpatriotic economic saboteurs quickly jumped out to remind Nigerians that petroleum is an “international citizen” that can only be traded in the US dollar.

They may need to be reminded that America had pledged to ensure that the House of Saud would forever rule Saudi Arabia if they could convince other members of the Organisation of Petroleum Exporting Countries cartel to adopt the dollar-for-petroleum payment scheme for the international petroleum trade.

Indeed, there is nothing sacrosanct about the dollar-for-petroleum option. Any other currency is eligible for petroleum trading. The naira-for-petroleum option that President Tinubu introduced into Nigeria is equally viable. And it should significantly contribute to strengthening the naira if it is extended to foreign buyers of Nigeria’s high-grade Brent crude.

This is how it will work: To buy Nigeria’s crude or refined petroleum, buyers must first buy the naira (from the Central Bank of Nigeria) and use it to pay for commodities from NNPCL. That way, Nigeria will still have the dollars that can be used to pay for its imports.

Additionally, the increased demand should strengthen the naira. After all, the law of supply and demand, the foundation of Western economic theory, postulates that increased demand should increase the price of a commodity, all things being equal.

It is regrettable that members of the Technical Sub-Committee, whom the President charged with the administration of the deal, could not work out a long-term template within the initial six-month trial period that was given to them.

It is true that President Tinubu, who met the petrol pump price at N195 per litre, unnecessarily announced that “fuel subsidy is gone”, and thus raised the pump price to N557 the day after his inauguration. It went further up, to as much as N1,184 and beyond in the black market. And the cost of everything else rose to dizzying heights.

But when his directive that NNPCL should sell petroleum to local refineries in naira took off on October 1, 2024, Dangote Refinery, the major beneficiary of the naira-for-petroleum deal, was able to initiate a steady drop in the price of petrol just before Christmas in 2024.

Within three months, the price tumbled from N970 to N870, to N825, to N815, which is N70 lower than the landing cost of imported petrol, whose price increased by N88. This got the dander of the “secret agents” of international monopoly capital up, and they began to look for ways to surreptitiously end the deal.

They probably thought that if Dangote Refinery continued that trend, the price of petrol could further drop to N500, or even lower, in 2025. Dangote Refinery, which is neither Father Christmas nor the Red Cross, would not have been shaving the price of petrol if it were running at a loss.

This suggests that it has always been possible to produce and sell petrol at a price lower than what NNPCL has always offered. It is just that those who have been running NNPCL have either been incompetent or insensitive to the plight of the poor masses of Nigeria.

Those running NNPCL, which has been doing its business by generally spewing half-truths and illusions, lately hugging media attention to announce that they are finally running NNPCL’s Port Harcourt and Warri refineries, must be more adroit in meeting their obligations.

They did not need the Petroleum Products Retail Outlet Owners Association of Nigeria to announce that (one of) the Port Harcourt refineries, which had been idle for 20 years, has been steadily producing petroleum products in the past 180 days.

Despite the antiseptics of the propaganda sandpapering, the people at NNPCL still felt the heat and the shame of their loss of the market to Dangote Refineries, so much that they had to find a way to hamper the operations of a refinery in which they have as much as 7.2 per cent stake.

Industry watchers say that, from the inception of the deal, NNPCL had consistently failed to provide Dangote Refinery with 350,000 barrels of petroleum per day as the President had directed. At best, they only supplied 120,000 barrels per day. By February 2025, they had halted the supply completely.

Obviously, someone is running rings around the President, who is the Minister of Petroleum Resources. Somehow, those with the responsibility to run the project could not work with a template for the whole six months of the trial.

They probably endured President Tinubu’s naira-for-petroleum deal with the hope that they would gleefully report how it could not work and must end. In their usual lying manner, they have started to manufacture a device to invent the next spin.

The Nigeria Upstream Petroleum Regulatory Commission, which should have been supervising the scheme in the first place, is reported to be asking the Technical Sub-Committee, a special-purpose vehicle, to make suggestions on how to sustain the deal.

The depressing news is that the meeting between the Technical Sub-Committee on the naira-for-petroleum deal and Dangote Refinery was stalled because NUPRC (expectedly) failed to provide a way to perform an assignment that its “simulated” incompetence caused in the first place.

In the end, Dangote Refinery thought up a wise and diplomatic way to tell Nigerians that the deal of selling its petrol for naira is off because its deal to buy petroleum for naira from NNPCL is off. Nigeria’s economic saboteurs finally got around to botching the President’s idea of regularly providing petrol to Nigerians whilst also strengthening the naira.

Now, Nigerians can only expect to pay more for petrol. Indeed, almost immediately after Dangote Refinery announced that the prices of its products would rise because the naira-for-petroleum deal had collapsed, the pump price of petrol jumped to N930 in Lagos and N970 in parts of Northern Nigeria.

Understandably, PETROAN, which dreads the sale of petroleum products in dollars, has weighed in, calling on the government “to ensure that all transactions within the country are conducted in the local currency, the naira, to protect the economy and the welfare of Nigerians”.

The Economic and Financial Crimes Commission should begin to enforce Sections 20(1) and 20(5) of the CBN Act, which respectively provide that only currency issued by the CBN shall be legal tender in Nigeria and that no one can refuse to accept the naira for economic transactions in Nigeria.

Though other currencies shall be acceptable for bona fide tourists and for CBN’s foreign exchange trading and approved foreign exchange transactions, even as the Senate is said to be considering a bill to outlaw the use of foreign currency in Nigeria.

President Tinubu and NNPCL Chairman, Pius Akinyelure, should not rely on the petroleum sector bureaucrats but use their private sector experiences to return the naira-for-petroleum deal in the interest of Nigerians.