President of the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), Benneth Korie, has thrown his weight behind the federal government’s plan to sell crude oil in Naira to domestic refiners urging refiners to reciprocate by selling refined products in naira to the distributors to aid the stability of the market.
Korie emphasised the need for inclusivity in the distribution of refined products and called for the government to expedite the Port Harcourt refinery’s reopening.
This initiative aims to stabilise fuel prices and enhance local refining capacity, reducing reliance on imports and addressing smuggling issues in the sector.
The Federal Executive Council had last month accepted a suggestion put forward by President Bola Tinubu to sell crude oil to Dangote and other local refineries in Naira.
The Dangote Refinery currently needs 15 shipments of crude oil annually, amounting to a total cost of $13.5bn.
The NNPC Ltd had pledged to provide four of these cargoes.
The FEC also agreed to make available 450,000 barrels for local consumption, which will be offered to Nigerian refineries in Naira, with the Dangote Refinery being the initial test.
The exchange rate will remain constant throughout this transaction.
Speaking on the development, Korie, called on refineries to also reciprocate the government’s efforts by selling their petroleum products in Naira to oil marketers.
He said, “Firstly, regarding refined products, we must foster a competitive environment to ensure the healthy circulation of petroleum products, and to this end I commend Aliko Dangote for his monumental contribution to our industry through the establishment of the largest refinery in Nigeria.
“This development promises substantial benefits, including enhanced supply, increased competition, and a bolstering of our national economy and currency.
“To ensure a balanced distribution, I urge that Dangote’s refined products be made available to a broader range of stakeholders, including NNPC Trading, NNPC Retail, DAPPMAN, MOMAN, IPMAN, PETROAN, and NOGASA. This inclusivity will facilitate sustainable and widespread distribution across the country.
“Furthermore, the federal government should expedite the commencement of the Port Harcourt refinery slated for September. This will help alleviate current shortages and ensure that products are distributed among the same stakeholders.
“I also want to express our support for Mr. President’s directive to sell crude oil in Naira. We hope that our refineries will reciprocate by selling refined products in Naira, thus stabilising the market.”
On the issue of smuggling, Korie said there is a need to redesign distribution channels to prevent illegal exportation of petroleum products.
“Strengthening our security agencies, especially at border points, with necessary equipment and support is crucial. Additionally, providing logistics and drones for surveillance will help combat smuggling and theft effectively,” he added.
Regarding the prices of Automated Gas Oil (AGO), with Dangote’s refinery production and crude oil transactions in Naira, the marketer said he expects a reduction in AGO prices.
“NNPC should leverage its shares in Dangote’s refinery to drive down these costs, which will, in turn, lower transportation expenses and reduce market prices.
He also acknowledged the efforts of the NMDPRA in regulating the industry, and urged them to ensure that products are available to marketers at fair prices to prevent profiteering.
“Government should also facilitate the availability of CNG kits and conversion centres; Marketers are ready to offer their stations for these purposes, which will reduce reliance on PMS and AGO, Korie said.
