President Bola Tinubu on Tuesday, said with the current Naira-based sale of crude oil and refined products, there will be some level of stability in the downstream sector.
Tinubu, who spoke during a review meeting of the technical committee on implementation of the new arrangement at State House, Abuja, urged members of the committee to resolve any teething problems.
He said the naira transactions were conceived to remove the exchange rate hurdle, stressing that his administration is determined to do away with decisions that are not progressive.
The president stated, “Whatever solution we proffer in crude oil and refined products sales in Naira should not take us back to our experience in the last 40 years. There can be cost and revenue adjustment in the oil sector, but the issue is that the government will not have to go back to the old way of doing things.”
Tinubu said the various players in the oil sector, including the Nigerian National Petroleum Corporation Limited (NNPC) and Dangote refinery, should work to improve the economy and the livelihoods of Nigerians.
He urged stakeholders to look inward and consider supplying enough petrol and petroleum products for local consumption to stop the persistent reliance on importation. He said this would enable the channelling of foreign exchange to development of the real sector.
The president advised stakeholders to partner Afreximbank as a settlement bank to resolve the naira pricing for crude and refined products.
Afreximbank is already on board as the financial adviser.
He added, “The market must determine what we are doing. Once you allow the market to determine the profit and loss, independent marketers and the government side can meet on the worksheet. I want the issues resolved without future waste of time.
“We can have energy security, and the motivation for Alhaji Aliko Dangote will not be defeated. It will be more predictable on a medium and long-term basis.”
Earlier, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the administration’s ground-breaking steps to sell crude in Naira will not be reversed. Edun said the government will not be involved in determining the rate of exchange for the oil sector.
President and Chief Executive of Dangote Group, Aliko Dangote, told the president that his refinery had more than 500 million litres of fuel in reserve after supplying 400 million litres to the domestic market.
Dangote said the refinery could collaborate with the other refineries managed by NNPC to meet an estimated 32 million litres of local petrol needs.
At the meeting, Chairman of Federal Inland Revenue Service (FIRS), Zach Adedeji, who chairs the technical committee, said importing refined products should end once Nigeria developed the capacity to produce enough to meet domestic need.
“The vision of Mr President is to turn Nigeria into a hub for refined products to export to the world,” Adedeji explained.
Other stakeholders at the meeting included President and Chairman of the Board of AfreximBank, Professor Benedict Oramah; Minister of Budget and National Planning, Senator Abubakar Bagudu; and Group Managing Director of NNPC, Mele Kyari.
Special Adviser to the President on Energy, Olu Verheijen, and chief executives of the Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigerian Ports Authority (NPA) also attended the meeting, along with the chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, and Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed.
Briefing newsmen, also, Edun shared insights from the meeting with Tinubu regarding the implementation of the initiative to sell crude oil to local refiners in Naira.
He said the initiative received full endorsement from the Federal Executive Council (FEC), with the aim of stabilising the petroleum market and enhancing local production capabilities.
Edun stated, “We had a session with Mr. President to review the implementation of this bold initiative. It allows local refiners to purchase crude oil and sell their products in Naira to the Nigerian public.”
He applauded Dangote Group’s substantial investment in a refinery with the capacity of 650,000 barrels per day as a key enabler of the initiative.
Edun emphasised that the implementation committee had been working diligently with various stakeholders, including regulatory bodies, such as NMDPRA and NNPC, to ensure the initiative’s success.
He said, “What we have achieved is the establishment of market pricing for petroleum products. This, coupled with market pricing for foreign exchange, sets our economy on a path toward industrialisation.”
Edun highlighted the broader economic implications of the initiative, stating that it would provide essential raw materials, not only for agriculture, but also for industries, such as chemicals, textiles, and building materials.
“This is part of Mr. President’s strategy to create favourable conditions for private sector investment, job creation, and economic growth,” he explained.
Meanwhile, for the umpteenth time yesterday, NNPC raised the pump price of petrol, especially in Lagos and Abuja.
It was the third price hike in less than two months, as the pump price in Lagos rose from N998 per litre to N1,025 and in Abuja from N1,030 to N1,060 per litre.
Outlets in Lagos and Abuja immediately effected the increase, as Nigerians faced the harsh effect of the removal of subsidy and the operation of a fully deregulated downstream environment.
Amid the increase on Tuesday, fuel queues persisted in Abuja, as the NNPC mega filling station in Zone 1 was besieged by motorists, while many private filling stations sold for over N1,200 per litre.
Deji Elumoye and Emmanuel Addeh
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