The Senate on Tuesday expressed confidence that the lifeline offered to the Dangote Refinery for the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to the 650,000 barrels per day facility in local currency will help strengthen the naira.
The Red Chamber through its Committee on Finance, expressed the optimism in a statement by the Chairman, Senator Sani Musa.
On Monday, the Federal Executive Council (FEC) rose from its meeting presided over by President Bola Tinubu with an express approval of the sale of crude oil to indigenous refineries including the Dangote Refinery in Naira.
Briefing newsmen at the end of the meeting at the State House, Abuja, Chairman, Federal Inland Revenue Service (FIRS), Zacch Adedeji said Tinubu had directed the NNPC to ensure it was done with immediate effect.
Adedeji stressed that the memo by the president when implemented will promote the sale of crude oil within local refineries and NNPC to deal in local currency, stressing that the sales of products from the Dangote Refinery to distributors will also be conducted in naira.
Adedeji said Nigeria currently spends between 30 per cent to 40 per cent of foreign exchange on importation of petrol that it consumes, stressing that monthly, Nigeria spends roughly $660 million on the exercise, resulting in $7.92 billion annually.
But on Tuesday, the panel commended Tinubu for what it termed his forward-thinking and impactful decision to approve the sale of crude oil to local refineries in Nigeria using Naira.
“This strategic move is a significant milestone in our nation’s journey towards economic self-sufficiency and stability. By allowing transactions in our local currency, this policy not only strengthens the Naira but also reduces our dependency on foreign exchange.
“This will likely lead to increased efficiency within our local refineries, boosting domestic production and ensuring a more consistent and affordable supply of refined petroleum products for all Nigerians,” the lawmakers said.
The Finance panel expressed the hope that the gesture will enable the NNPC, Dangote Refinery and all domestic producers to take advantage of the opportunity to make their business decisions towards making production more affordable, sustainable and qualitative for the good of the country.
The Committee said: “This decision reflects a deep commitment to fostering national growth, supporting local industries, and ensuring that the wealth generated from our natural resources benefits our economy directly.
“It is a testament to Mr. President’s visionary leadership and dedication to the prosperity of our country.”
The Senate panel applauded the initiative saying it was looking forward to witnessing the positive impact it would undoubtedly have on the nation’s economic landscape.
Meanwhile, the Arewa Think Tank (ATT) has noted that barely 24 hours after it ran an advertorial in a national daily about its position and the stand of other Civil Society Organisations (CSOs) condemning alleged sabotage of Dangote Refinery by NNPC, the FEC has approved crude oil supply to the refinery.
In a statement by the Convener of the group, Muhammad Yakubu and the Co-Convener of the CSOs, Rev. Nicholas Jatau, the groups said the FEC approval of the crude oil supply to Dangote Refinery showed that Tinubu is a listening leader.
“We are happy that in a significant policy shift, President Bola Tinubu has instructed the NNPC to sell crude oil to Dangote Refinery and other emerging refineries in Naira. This directive aims to stabilise the pump price of refined fuel and manage the dollar-naira exchange rate.
“This decision was reportedly adopted during the FEC meeting of Monday, July 29. This shows that Mr. President has a listening ear to various complaints regarding the Dangote refinery.
“This development follows recent statements by Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), on July 18, alleging that local refineries, including the Dangote refinery, produce inferior products compared to imports. In response, Dangote refuted these claims by demonstrating the quality of his refinery’s diesel on July 20 during a visit by federal lawmakers.
“We know that Aliko Dangote also highlighted issues with International Oil Companies (IOCs) not supplying crude oil to his refinery, calling for an investigation into these allegations. Subsequently, on July 22, lawmakers initiated probes into Ahmed’s claims and the alleged obstructions by IOCS.
“We understand that the key points of President Tinubu’s directive is to ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate, so the Federal Executive Council adopted a proposal by President Tinubu to sell crude to Dangote Refinery and other upcoming refineries in Naira.
“It is a stepping stone that NNPC has committed to supply four cargoes of crude out of the Dangote Refinery at the moment which requires 15 cargoes of crude, at a cost of $13.5 billion yearly.
“But the FEC has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as a pilot.
“We also understand that Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game-changing intervention will eliminate the need for international letters of credit. It will also save the country billions of dollars used in importing refined fuel,” the groups said.
The groups also appreciated the president for the establishment of the North-West Development Commission (NWDC) and that of the South-East, stressing that it was a good initiative for the development and progress of the region.
They stated that the signing of the minimum wage of N70,000.00 into law without delay was a sign that many good things were coming the way of the people of the country, urging Nigerians to give Tinubu enough time and space to perform.
“We want to use this opportunity to caution the United States, United Kingdom, and Canada for issuing security alerts to their citizens in Nigeria, warning them of potential violence during the planned nationwide protests.
“We consider this as putting mere fears on travellers when there is calm and security for every citizen in Nigeria despite the looming threats of nationwide protest,” the statement said.
Emmanuel Addeh and Sunday Aborisade
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