CORAN: First phase of crude oil sale in naira is for refineries producing petrol

The Crude Oil Refinery-owners Association of Nigeria (CORAN) says the Nigerian National Petroleum Company (NNPC) Limited will only sell crude oil in naira to refineries that produce petroleum motor spirit (PMS), also known as petrol.

On July 29, the federal executive council (FEC) approved a proposal by President Bola Tinubu directing the NNPC to sell crude oil to Dangote Petroleum Refinery and other refineries in naira.

The federal government said the sale of crude oil to the Dangote refinery and other refineries in naira would commence on October 1.

The ministry of finance had said the decision was made at a meeting with the technical implementation committee led by Wale Edun, minister of finance.

Speaking to TheCable on Monday, Eche Idoko, publicity secretary of CORAN, affirmed that the sale would begin on October 1.

However, he said it does not necessarily mean that “sales will start tomorrow”.

Idoko said the federal government had promised to only supply crude oil to the Dangote refinery as it was the “only refinery producing petrol”.

He said the federal government had promised to include other refineries in subsequent stages of the sale.

“We were present at the inaugural meeting where the federal government did make us understand that they would want to start the naira sales in phases. That they would start with refineries that are producing PMS first and extend it to other refineries and that’s where they are right now and we can say the first phase of the naira sales will start in October,” he said.

“No other refinery (apart from Dangote refinery) is selling petrol at the moment but I know that there are other refineries working on their plants that would be producing petroleum like the Clairgold refinery which intends to produce PMS.

“There is also Aradel which is working on their PMS plant. There is also Azikel Petroleum Refineries, which is also working on producing PMS.

“The last I heard with respect to that arrangement, the October date still remains and we have spoken with people at Dangote and they said conversations are ongoing.”

However, he said the details of the transactions would be made known when the federal government makes the announcement.

“For instance, are they going to discounts as in the normal practice when you are selling crude to the international traders? If there is going to be a discount, that is what will guarantee the reduction in price of petroleum products,” Idoko said.

“We also want to know at what rate is the exchange rate pegged. Is the federal government intending to maintain the N1,600 exchange rate?”

He said Nigerians would know the potential price of petroleum products when all the details are unveiled.

‘FG SHOULD REGULATE PRICE OF AGO’

Idoko said the association recommended to the federal government that automotive gas oil (AGO), also known as diesel, should be regulated.

“The AGO, which most utility trucks rely on, needs to also be regulated and most of our members already produce AGO,” he said.

Idoko said the association advised the federal government to include AGO because it is used for industrial purposes.