The Crude Oil Refinery-owners Association of Nigeria (CORAN) has disclosed that its members have not yet received crude oil sales in the local currency, the naira. This revelation came during an interview with Channels TV, where Echie Idoko, the Public Secretary of CORAN, discussed the current status and challenges of implementing this new policy.
President Bola Tinubu, through the Federal Executive Council (FEC), had previously approved the sale of crude oil to the Dangote refinery in naira. This decision aimed to facilitate better accessibility and supply to the $19 billion petrochemical plant. Despite this announcement, CORAN members have not begun receiving crude oil in naira, highlighting the need for regulatory actions to implement the mandate effectively.
Idoko explained that while the announcement was positive, several steps still need to be taken for it to become practical. “We have mentioned where we are on several fronts. As it stands right now, none of our members have started uplifting crude oil in naira. Of course, we did mention that the pronouncement was welcoming, but there were still a few steps that had to be taken for it to become implementable,” he said.
The crux of the issue lies in the lack of regulatory guidelines necessary for accessing crude oil in naira. Idoko emphasized the need for clear directions on how the process should work. “There has to be a guideline as to how we can access it. We have to know exactly what quantity is coming to us in naira. All those details have to be worked out. We know it’s a recent pronouncement, so we will give the government the benefit of the doubt,” he noted.
He also stressed the importance of involving stakeholders in developing these guidelines. “We are hoping that in the coming days, there will be sitting down with us as stakeholders because you can’t shave a man’s head in his absence. We are hoping that our members should be part and parcel of the processes,” Idoko added.
The Federal Executive Council had earlier approved selling crude oil to the Dangote refinery in naira to ensure the plant’s supply and reduce pressure on the foreign exchange market. This decision followed weeks of conflicts between Dangote and the oil and gas regulatory agencies, which provided the refinery a way to obtain crude from the Nigerian National Petroleum Corporation (NNPC) using local currency.
The new directive allocates 450,000 barrels of crude for domestic use to be sold to Nigerian refineries in naira, with Dangote Refinery as the pilot for this initiative. Additionally, the $19 billion refinery will sell its refined products in naira, ensuring smooth transactions in the mid and downstream sectors.
The decision to sell crude oil in naira is part of broader efforts to stabilize Nigeria’s foreign exchange market and strengthen the local economy. By allowing transactions in the local currency, the government aims to reduce the demand for foreign currency, thereby alleviating pressure on the naira. This move is expected to benefit not only the Dangote refinery but also other local refineries that will eventually participate in the initiative.
However, the lack of immediate implementation has raised concerns among industry players. The transition to naira transactions requires careful planning and coordination to ensure that all parties understand the process and can comply with the new regulations. The involvement of CORAN and other stakeholders in this process is essential to address any challenges and ensure a smooth transition.
