Naira Crude Sales: Tinubu's Plan for Nigeria's Economic Growth

Tinubu Promises Oil Sector Stability with Naira Crude Sales

“There can be cost and revenue adjustment in the oil sector, but the issue is...”

Nigeria's oil sector gets boost as President Tinubu meets with stakeholders, reaffirming Naira-based crude sales and domestic production goals.

President Bola Tinubu commended the Implementation Committee overseeing Naira-based sales of crude oil and refined products for their efforts during a review meeting at Abuja's State House on October 29. He emphasized the importance of swiftly addressing initial challenges, noting that transitioning to Naira transactions aims to alleviate exchange rate hurdles.

The shift to Naira transactions is a strategic move to enhance Nigeria's refining capacity and promote economic growth. The Federal Executive Council approved President Tinubu's proposal to sell crude oil to local refineries, including the Dangote Refinery, in Naira. This initiative is expected to reduce pressure on the Naira, eliminate unnecessary transaction costs, and improve the availability of petroleum products across the country.

Benefits of Naira-based Crude Sales

Reduced Pressure on Naira: Eases exchange rate obstacles and stabilizes the local currency.

Improved Product Availability: Enhances the domestic fuel supply chain and increases petroleum product availability.

Increased Transparency: Promotes transparency in oil transactions and reduces reliance on US dollars.

The Implementation Committee, chaired by the Minister of Finance, is working closely with NNPC and Dangote Refinery to ensure a smooth implementation process. With this initiative, Nigeria aims to position itself as a refining hub, boosting the economy and fostering local expertise in the energy sector.

“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, the President said.

“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.”

President Bola Ahmed Tinubu is driving change in Nigeria's oil sector. He's urging key players like the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery to prioritize economic growth and improve Nigerians' quality of life. This push for progress is part of a larger strategy to reduce dependence on imported petroleum products and redirect foreign exchange toward developing Nigeria's real sector.

To achieve this, President Tinubu is advocating for a significant boost in domestic petrol and petroleum product supply. By producing more locally, Nigeria can reduce its reliance on imports and allocate valuable foreign exchange to sectors that will drive sustainable economic growth. This move is expected to have a positive ripple effect throughout the economy.

Recommendations for Oil Sector Stakeholders:

Boost Domestic Supply: Increase production of petrol and petroleum products to reduce import dependence.

Collaborate with Afreximbank: Work with Afreximbank, the designated settlement bank, to facilitate Naira-based pricing for crude and refined products.

Prioritize Economic Growth: Focus on strengthening the economy and enhancing Nigerians' quality of life.

President Tinubu's administration has already taken steps to support the oil sector, including introducing fiscal incentives for non-associated gas, midstream, and deep-water developments, streamlining contracting processes, and promoting local content requirements. These efforts aim to create a more attractive investment environment and accelerate growth in Nigeria's oil and gas sector.

“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,” Tinubu added.

“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.”

Finance Minister Wale Edun has reaffirmed the government's commitment to selling crude oil in Naira, with no plans to set exchange rates for the oil sector. This decision is part of President Bola Ahmed Tinubu's efforts to revitalize Nigeria's oil and gas sector, which has been struggling with declining production and investment.

In a recent meeting, President Tinubu received updates from key stakeholders, including the President and CEO of Dangote Group, who reported that the refinery has over 500 million liters of fuel in reserve, with 400 million liters already supplied to the local market. The Dangote refinery is poised to collaborate with NNPCL refineries to meet the daily demand of 32 million liters of petrol.

Major Takeaways from the Meeting:

Domestic Production Capacity: Once local production meets demand, importation of refined products will cease, as stated by FIRS Chairman Zach Adedeji.

Collaboration and Investment: The government is encouraging collaboration between private refineries and NNPCL to boost domestic production.

Economic Growth: These efforts aim to strengthen the economy, reduce dependence on imports, and increase foreign exchange earnings.

President Tinubu's administration has introduced various reforms to attract investment, including tax incentives for non-associated gas, midstream, and deep-water developments, as well as streamlined contracting processes. These initiatives demonstrate the government's commitment to transforming Nigeria's oil and gas sector.

“The vision of Mr President is to turn Nigeria into a hub for refined products to export to the world.”

President Bola Ahmed Tinubu recently convened a crucial meeting with key stakeholders in the oil and gas sector to discuss the implementation of the Naira-based sales of crude oil and refined products. In attendance were prominent figures such as Prof. Benedict Oramah, President and Board Chairman of Afreximbank; Sen. Abubakar Atiku Bagudu, Minister of Budget and National Planning; and Mele Kyari, Group Managing Director of NNPC Limited.

Other notable attendees included Olu Verheijen, Special Adviser to the President on Energy; the CEOs of NIMASA and the Nigerian Ports Authority; Engineer Gbenga Komolafe, head of the Upstream Regulatory Commission; and Farouk Ahmed, head of the Midstream and Downstream Petroleum Regulatory Authority, NMDPRA. This gathering aimed to facilitate collaboration and drive progress in Nigeria's oil and gas industry.

Stakeholders in Attendance:

Afreximbank Representation: Prof. Benedict Oramah, President and Board Chairman

Government Officials: Sen. Abubakar Atiku Bagudu, Minister of Budget and National Planning; Olu Verheijen, Special Adviser to the President on Energy

Industry Leaders: Mele Kyari, Group Managing Director of NNPC Limited; Engineer Gbenga Komolafe, head of the Upstream Regulatory Commission; Farouk Ahmed, head of the Midstream and Downstream Petroleum Regulatory Authority, NMDPRA

Regulatory Bodies: CEOs of NIMASA and the Nigerian Ports Authority 

This meeting is part of President Tinubu's efforts to reform the oil and gas sector, following his signing of executive orders aimed at improving the investment climate and positioning Nigeria as a preferred destination for oil and gas investments in Africa.