FG’s Naira-for-Crude committee to reconvene amidst Dangote Refinery deal uncertainty

There are strong indications that the Federal Government’s Naira-for-Crude panel will reconvene on Monday to deliberate on the continuation of its crude sales agreement with Dangote Refinery.

This move comes in the wake of growing uncertainties surrounding petroleum product pricing in Nigeria.

Reliable sources within the Ministries of Petroleum Resources and Finance, who spoke on condition of anonymity, confirmed the scheduled meeting on Thursday.

The development follows Dangote Refinery’s announcement on Wednesday that it had suspended the sale of petroleum products in Naira, raising concerns over a possible deadlock in negotiations between the Nigerian National Petroleum Company Limited (NNPCL) and the refinery regarding the continuation of the Naira-for-Crude sales arrangement.

While the suspension has fueled speculations of a breakdown in discussions, government insiders have suggested that the scheme is not expected to be scrapped entirely.

The primary challenge, they revealed, revolves around crude oil availability, as the NNPCL has reportedly pre-sold a significant portion of its crude to foreign creditors under its crude-backed loan agreements.

“The scheme won’t end. The major challenge is crude availability, with NNPC claiming it has pre-sold large volumes to fulfill loan obligations,” an official disclosed.

“The committee agreed to reconvene on Monday to review potential solutions that the Nigeria Upstream Petroleum Regulatory Commission has been tasked with formulating. The focus is on finding viable alternatives.”

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The panel had previously convened last week at the Ministry of Finance Headquarters in Abuja to assess ongoing developments and reaffirm commitments to the Naira-for-Crude policy framework.

Key attendees of that meeting included the Minister of Finance and Coordinating Minister of the Economy, Wale Edun (who participated virtually); the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji; the Chief Financial Officer of NNPCL; the Executive Commissioner of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (who also joined virtually); and other critical stakeholders.

Meanwhile, industry stakeholders have expressed mixed reactions to the current situation. The National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, emphasized that market players would explore alternative sources to meet demand should the agreement between the government and Dangote Refinery face prolonged uncertainty.

“The market is making preparations for any surprises. If there are disruptions, we’ll have alternatives to turn to,” Gillis-Harry stated.

Similarly, the President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, called for government intervention to ensure the continuity of the Naira-for-Crude policy to stabilize petrol prices.

“I urge the Federal Government to revisit its agreement with Dangote Refinery to sustain the existing petrol pricing structure and avoid unnecessary fluctuations,” he said.