There is a concern that the Naira initiative for raw, which guarantees that local refineries receive crude oil in Naira and sell products refined to sellers in the local currency, can be threatened with the crude oil supply inappropriate to national refiners, demonstrated
President Bola Ahmed Tinubu had directed the sale of crude oil to Dangote in Naira as part of a movement to reduce the cost of the premium motor spirit (PMS), also known as gasoline.
In October 2024, the Federal Executive Council (FEC) approved that 450,000 barrels destined for internal consumption in Naira were offered to Nigerian refineries, with the Dangote refinery that acts as a pilot project.
According to the scheme that began in the first week of October 2024, the NNPCL was expected to supply 385,000 barrels of crude oil to the Dangote refinery of 650,000 CBD located in IBEJU-Lekki Lagos.
However, the findings showed that there has been a low consistent supply of assignments to the Dangote refinery, which forced him to resort to importation.
The official documents reviewed by our correspondent revealed that although the production of crude oil from Nigeria has increased marginally, exceeding 1.8MBPD, there has been a strong decrease in the volume of crude oil assigned to the Naira-Forte-Cude scheme.
The document revealed that by February 2025, the scheme has been assigned only four charges, and for March, only two charges for a total of 950,000 barrels (1.9 million barrels in total for the month). This represents an allocation of 61,290 barrels per day, well below the objective of 385,000 BPD under the scheme.
The Dangote refinery will receive 12 million barrels of crude oil from the United States, since local supply limitations have hindered their attempt to achieve a total refining capacity of 650,000 barrels per day.
In the midst of this challenge, it was learned that the Nigerian National Petroleum Corporation (NNPC) Limited and allied vendors continue to import oil products in the country, spending more than N5 billion in the importation of the PREMIUM Motor Spirit (PM) and Diesel ( Aug) within 110 days.
An oil and gas expert in the public sector, who spoke on condition of anonymity warned that Naira's initiative for raw could be undermined and threatened with the potential to improve energy security in Nigeria.
He stressed that these products, paid completely in Naira, are crucial for government efforts to stabilize and strengthen currency.
“Refineries completely pay for these products to international rates, but in Naira. The Dangote oil refinery and other national refineries sell sellers in Naira, thus eliminating the risks of currencies or currencies and reducing the dependence of the dollar for national transactions.
By aligning national transactions with Naira payments, the government is effectively reducing the dependence of Nigeria of the US dollar, particularly in the oil sector, where a large part of Nigeria's foreign reserves has traditionally spent on oil imports ” , he explained.
He added that, “without a doubt, its success is a testimony of the visionary leadership of President Bola Tinubu and the Federal Executive Council, who, despite the persistent opposition, have ensured their successful implementation. This initiative, which is critical for economic reforms In the course of Nigeria, it should not derail. ”
Import continues despite local refineries
According to the report of engines of the engines of the Nigerian port authority, a total of 2,846,499,41 metric tons of PM and 791,619.00 Metric tons of diesel were imported between October 1 and December 31, 2024.
In addition, a total of 342,199mt of PM and 146,866mt of the country between January 1 and 29, 2025 were imported.
This is equivalent to the import of more than four billion (4,276,044,567,81) liters of PMS and more than one billion (1,103,658,360) liters of diesel within 121 days, using a conversion factor of 1,341 liters per metric ton for PMs and 1,176 liters per ton per meter for it.
At an average landing cost of N940 per liter for PMS and N920 per liter per, Nigeria has spent more than four billion Nairras (N4.019 billion) importing gasoline and more than one billion naira (N1.015 billion) in Diesel imports during the period during the period.
This continuous import despite the enormous capacity of local refining is aimed at paralyzing local refineries, especially Dangote's oil refinery, said another source.
The oil and gas expert, Dr. Ayodele Oni, in a conversation with our correspondent said that despite the best production of crude oil, the forward sales arrangements had made it difficult for the NNPC to comply with the obligations with local refiners.
He said that the disinversion of the IOC is also responsible for the challenge, saying that there must be an improved production to sustain the Naira for the raw scheme.
However, the expert declared that it is strange that Nigeria continues to import both despite the increase in refining capacity through Dangote Refinery, Aradel, and recently revived government refineries.
A source of the Dangote refinery that spoke on condition of anonymity explained that in line with its commitment to serve the Nigerians and maintain affordable prices, the refinery continues to sell products to the sellers in Naira while absorbing logistics costs to guarantee uniform prices throughout the country.
“The refinery generously assumes the state of equalization, which only the government undertakes. This has been enthusiastically received by our partners, such as Mrs., Heyden and Ardova. The Association of Outlet Retail Outlets of Petroleum Products has signed an agreement with the refinery to distribute its PMS throughout the country at a uniform price in all its filling stations, ”he said.
The main NNPC LTD spokesman, Mr. Olufemi Soney, could not be contacted on Thursday, to comment on the challenges to meet the obligations with local refiners. The calls and text messages were not answered at the time of presenting this report.
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