The Nigerian Ports Authority (NPA) is set to play a crucial role in implementing the Federal Government’s initiative to facilitate the sale of crude oil and petroleum products to the Dangote Refinery in naira. This decision comes as part of a broader strategy to strengthen the local economy by promoting the use of local currency in oil transactions. In a recent announcement, the Managing Director of the NPA, Dr. Abubakar Dantsoho, emphasized the agency’s dedication to ensuring that regulatory, security, and other stakeholders work in a coordinated manner to streamline this initiative. The agency’s commitment is underscored by its establishment of a One-Stop Shop (OSS) to serve as a centralized point for the efficient handling of petroleum product sales.
At an inter-agency stakeholders’ meeting held in Lagos, Dantsoho reassured participants about the NPA’s readiness to collaborate with various agencies to ensure that the initiative is executed smoothly and efficiently. He articulated the importance of the OSS, which is designed to facilitate cooperation among multiple entities, including regulatory and security agencies, ensuring a unified approach towards achieving the national objective of enhancing the availability of Premium Motor Spirit and other petroleum products. The establishment of this OSS is emblematic of the Nigerian government’s commitment to fostering an environment where local refineries can operate more effectively in a competitive market.
The One-Stop Shop will bring together representatives from a range of agencies critical to the execution of this initiative. Among the entities involved are the Nigerian Navy, Nigerian National Petroleum Corporation Limited (NNPC), Dangote Group, Federal Inland Revenue Service, Nigeria Customs Service, Nigerian Maritime Administration and Safety Agency, and the National Drug Law Enforcement Agency. This collaborative effort is expected to facilitate a comprehensive and unified approach to coordination, enhancing transparency and operational efficiency within the process of selling crude oil in naira. Ms. Maureen Ogbonna from the NPA’s Marine & Operations Directorate has been designated as the focal person for this initiative, emphasizing the agency’s commitment to oversight and managerial efficiency.
In a related development, the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency confirmed that the NNPC will commence supplying crude oil to the Dangote Refinery starting on October 1, 2024. This confirmation aligns with a previous announcement made on September 13, 2024, when the Federal Executive Council, under President Bola Tinubu, sanctioned the initiative to sell crude oil and purchase petroleum products in naira. This initiative aims to bolster local refineries and stimulate economic growth by reducing reliance on foreign currency in oil transactions.
According to the committee’s statements, around 385,000 barrels per day (kbpd) of crude oil will be supplied to the Dangote Refinery, which will be paid for in naira. This move is expected to have significant implications for the Nigerian economy, particularly in fostering local production capabilities and reducing the vulnerability associated with foreign currency fluctuations. By facilitating this local currency transaction scheme, the government aims to boost the Nigerian economy while ensuring a consistent supply of essential petroleum products.
Overall, the establishment of the One-Stop Shop by the NPA marks a significant milestone in Nigeria’s efforts to enhance the efficiency of its oil and gas sector. The initiative signals a shift towards local currency transactions in crude oil sales, reflecting a broader commitment to economic stabilization and growth within the country. The collaboration among various stakeholders indicates a pragmatic approach to addressing the challenges faced by local refineries and is likely to have lasting positive impacts on Nigeria’s petroleum industry and overall economic landscape. This initiative, set to commence in October 2024, lays the groundwork for a more self-sufficient and resilient energy sector in Nigeria, which is pivotal for the nation’s economic future.
