The first delivery of Premium Motor Spirit (PMS) from Dangote Refinery under the Naira-for-Crude agreement has been scheduled for September 2024.
The development which was disclosed through a statement by the Ministry of Finance.
It stated that marks a pivotal moment in Nigeria’s efforts to bolster the local economy through domestic currency transactions.
The statement from the Ministry of Finance, followed a meeting of the Implementation Committee on Crude Oil Sales in Naira confirmed the development.
The Implementation Committee, which is chaired by the Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, reviewed the progress of key initiatives aimed at transitioning crude oil sales from dollar to naira for local refineries.
The statement explained that Dr. Zacch Adedeji, the Executive Chairman of the Federal Inland Revenue Service (FIRS) and Chairman of the Technical Sub-Committee, provided the crucial update on the impending PMS delivery.
According to the statement, the committee has mapped out the plan for the commencement of Naira payments for crude oil transactions, with the Dangote Refinery set to start making payments in Naira from October 1, 2024. This aligns with the broader economic strategy of the government to reduce dependency on foreign currencies in critical sectors and enhance the value of the Naira.
Key stakeholders identified for ensuring the smooth implementation of this transition include the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Central Bank of Nigeria (CBN), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the African Export-Import Bank (Afreximbank). These bodies have been tasked with coordinating efforts to support the September PMS delivery under the new payment framework.
The move towards Naira-based crude oil transactions is expected to have far-reaching implications for the Nigerian economy. By anchoring such a vital economic activity in the local currency, the government aims to stabilize the Naira, reduce inflationary pressures from exchange rate volatility, and strengthen the nation’s fiscal resilience. Furthermore, the decision underscores Nigeria’s commitment to leveraging domestic resources to fuel its economic growth, aligning with broader goals of self-reliance and sustainable development.
In addition to the PMS delivery, the committee also reviewed progress on other key projects, notably the ongoing efforts at the Port Harcourt and Dangote Refineries. The statement from the finance ministry noted that significant increases in production are expected from November 2024, signaling a boost in domestic refining capacity that could reduce the nation’s reliance on imported petroleum products.
Edun, during the committee meeting, emphasised the need for transparency in the implementation process. He directed Dr. Adedeji and the Technical Sub-Committee to finalize all necessary details and prepare a comprehensive report for President Bola Tinubu, confirming that the directives issued are on track for the September rollout.
“With the Implementation Committee’s progress and Mr. Edun’s guidance, Nigeria is poised to witness a seamless transition to Crude Oil Sales in Naira. The collaboration among stakeholders, including regulatory bodies and financial institutions, will ensure a transparent and efficient implementation process,” the statement read.
As Nigeria approaches this critical economic milestone, the anticipated positive impacts on national growth and development are expected to set a new standard for economic prosperity.
The first delivery of PMS from the Dangote Refinery is a clear indication that Nigeria is moving towards a more robust and self-reliant economic structure, one that could redefine the country’s position in the global oil market while ensuring that the benefits of its vast natural resources are felt more directly by its people.
