Naira-for-crude policy remains in place-Chairman, Technical Sub-Committee
The Federal Government has disowned the recent reports making the round to the effect that the naira-based crude oil supply arrangement with the local refineries has been suspended ,saying that it never made such announcement.
A statement by the Chairman, Technical Sub-Committee, Zacch Adedeji ,said these reports do not reflect the realities of the ongoing work under the Federal Executive Council Initiative on Domestic Sales of Crude Oil and Refined Products in Naira.
Said Adedeji ,who also the Chairman of the Federal inland Revenue service (FIRS) “Our attention has been drawn to reports doing the rounds and suggesting that the naira-based crude oil supply arrangement with local refineries has been discontinued, forcing the domestic refineries to rely solely on international crude purchases.
These reports do not reflect the realities of the ongoing work under the Federal Executive Council Initiative on Domestic Sales of Crude Oil and Refined Products in Naira.
As the committee driving the implementation of this laudable initiative, we wish to provide an update on the Federal Executive Council initiative and confirm as follows:
o The Naira-Based Domestic Sales Framework Remains in Place
The policy framework enabling the sale of crude oil in naira for domestic refining remains in force. The initiative was designed to ensure supply stability and optimize the utilisation of local refining capacity. There has been no decision at the policy level to discontinue this approach nor is it being considered. After implementing the policy for some months, evidence abounds that it is the right way to go and it will continue to help the economy.
o Local Refineries Have Not Been Excluded from Domestic Crude Supply
The engagement process for crude oil supply to domestic refineries therefore remains in place by structured agreements, balancing factors such as availability, demand, and market conditions. There is no exclusion of local refineries from access to domestic crude. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.
o The Initiative Supports Competitive Pricing and Market Efficiency
The framework for domestic crude transactions is designed to promote a competitive and efficient pricing environment.
o The Committee Continues Its Work on Strengthening Implementation
We remain committed to ensuring the efficient execution of this initiative in line with its core objectives – enhancing local refining, reducing foreign exchange exposure, and stabilising the domestic fuel supply.”
