The attention of the Technical Sub-Committee on Domestic Sales of Crude Oil and Refined Products in Naira has been drawn to recent reports suggesting that the naira-based crude oil supply arrangement with local refineries has been discontinued. These reports alleged that local refineries have been forced to rely solely on international crude purchases. However, we wish to categorically state that these reports do not reflect the realities of the ongoing work under the Federal Executive Council Initiative on Domestic Sales of Crude Oil and Refined Products in Naira.
As the committee driving the implementation of this initiative, we deem it necessary to provide an update on the Federal Executive Council initiative and confirm the following:
The Naira-Based Domestic Sales Framework Remains in Place
The policy framework enabling the sale of crude oil in naira for domestic refining remains in force. This initiative was carefully designed to ensure supply stability and optimize the utilization of local refining capacity. We wish to emphasize that there has been no decision at the policy level to discontinue this approach, nor is it being considered. After implementing the policy for several months, evidence abounds that it is the right way to go, and it will continue to contribute positively to the economy.
Local Refineries Have Not Been Excluded from Domestic Crude Supply
The engagement process for crude oil supply to domestic refineries remains in place, guided by structured agreements that balance factors such as availability, demand, and market conditions. We wish to assure that there is no exclusion of local refineries from access to domestic crude. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.
The Initiative Supports Competitive Pricing and Market Efficiency
The framework for domestic crude transactions is designed to promote a competitive and efficient pricing environment. This approach ensures that local refineries can operate viably, while also contributing to the overall stability of the domestic fuel supply.
The Committee Continues Its Work on Strengthening Implementation
We remain committed to ensuring the efficient execution of this initiative in line with its core objectives: enhancing local refining, reducing foreign exchange exposure, and stabilizing the domestic fuel supply. Our committee will continue to work tirelessly to address any challenges that may arise and to identify opportunities for further improvement.
In conclusion, we hope this update provides clarity on the status of the Naira-for-crude policy. We are confident that this initiative will continue to play a vital role in promoting the growth and development of the Nigerian oil and gas industry.
e-Signed
Zacch Adedeji
Chairman, Technical Sub-Committee
