‘No going back’ — Tinubu says naira-for-crude transactions will stabilise oil sector

President Bola Tinubu says the oil sector will experience stability with the implementation of naira-for-crude transactions.

Tinubu spoke during a review meeting at the State House in Abuja on Tuesday. 

On October 5, the federal government officially announced the commencement of the sale of crude oil and refined petroleum products in naira.

Three weeks later, Dangote Petroleum Refinery received four cargoes of crude oil from the Nigerian National Petroleum Company (NNPC) Limited under the naira-for-crude sale agreement.

The president said using the naira was conceived to remove the exchange rate hurdle.

“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,” Tinubu 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.”

Tinubu also commended the implementation committee on the crude oil and refined products sale in naira and asked the members to resolve any teething problems.

He urged the various players in the oil sector, including the NNPC and the Dangote refinery, to collaborate to improve the economy and livelihood of Nigerians.

The president urged stakeholders to look inward and consider supplying enough petrol and petroleum products for local consumption to stop the persistent reliance on importation.

Tinubu said it would enable the channelling of foreign exchange into the development of the real sector.

‘USE AFREXIMBANK TO RESOLVE NAIRA PRICING’

Tinubu also advised stakeholders to use the African Export-Import Bank (Afreximbank), being the financial adviser on the deal, as a settlement bank to resolve the naira pricing for crude and refined products.

“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,” he said.

“I want the issues resolved without future waste of time.

“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.”

At the meeting, Wale Edun, minister of finance and coordinating minister of the economy, said the administration’s groundbreaking steps to sell crude in naira would not be reversed.

He said the government would not be involved in determining the rate of exchange for the oil sector.

Aliko Dangote, president and chairman of Dangote Group, told Tinubu that Dangote refinery had more than 500 million litres of petrol in reserve.

Dangote said the refinery could collaborate with the other refineries managed by NNPC to meet an estimated 32 million litres of local petrol needs.