Crude-for-naira deal will reduce forex pressure, says NECA

The Nigeria Employers’ Consultative Association has commended the agreement between the Federal Government and Dangote Refineries on the sale of Premium Motor Spirit to Nigerian National Petroleum Corporation Limited.

It stated that it highlighted a potential to end petrol scarcity and reduce pressure on foreign exchange demand in the country.

According to a statement from the association, the Director-General of NECA, Mr Adewale-Smatt Oyerinde, hailed the landmark pricing agreement that led to the lifting of petrol from the Dangote refinery.

Oyerinde said, “This singular event has the potential to change the perennial fuel scarcity situation in the county and also reduce the pressure on the naira.”

The NECA DG noted that while the current pump price was way above the expected price due to the dollar-denominated crude oil purchase, it was expected that the beginning of the crude-for-naira scheme agreed on from October 1, would cause a reduction in petrol pump price.

The NECA boss averred, “This new direction would not only benefit the Government, it would also have a massive impact on the business community and the Nigerian populace in general.”

He further noted that the measure would moderate the cost of fuels, reduce the long queues at filling stations across the country, and support the energy needs of small businesses.

 Oyerinde also commended the government’s intention to set up a one-stop shop that would harmonise the interests of all stakeholders, including regulatory and security agencies, to ensure a seamless implementation of the initiative.

He emphasised that such a one-stop-shop would not only enhance the swiftness of approvals for the lifting of refined products but also be cost-effective.

He identified a similar challenge in the local gas market, where the price of gas sold to domestic industries was benchmarked in US dollars.

Meanwhile, Oyerinde mentioned that industries, particularly the manufacturing sector, had suffered significant production setbacks due to limited foreign exchange and instability in the naira, which had made it difficult to purchase adequate gas for production.

Oyerinde urged the Federal Government to take similar steps to benchmark the price of gas in naira to support local industries, especially the manufacturing sector.

On July 29, the Federal Executive Council approved a proposal by President Bola Tinubu directing the Nigerian National Petroleum Company to sell crude oil to the Dangote refinery and other refineries in naira.