UPDATED: Sales of crude to Dangote in Naira begins October – Official

The Executive Chairperson of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, on Monday said the transition to crude oil sales to Dangote Refinery in Naira will begin in October.

A statement by the Ministry of Finance on Monday said the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, led the implementation committee meeting on the transition to crude oil sales in Naira.

The meeting reviewed progress on key initiatives, including the upcoming commencement of Naira payments for crude oil sales to the Dangote Refinery starting 1 October.

Mr Adedeji, who doubles as the Chairperson of the Technical Sub-Committee, said that the first PMS delivery from Dangote is expected next month under existing agreements.

Key roles were outlined for stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Central Bank of Nigeria, Nigerian Upstream Petroleum Regulatory Commission, and the African Export-Import Bank to ensure smooth implementation.

Updates on the Port Harcourt and Dangote Refineries were also provided, with significant production increases expected from November 2024.

The minister emphasised the need for transparency and directed the Technical Sub-Committee to finalise details and prepare a report for the president, confirming that his directives are on track for implementation from September.

Background

Recently, the Dangote Group and Nigeria’s petroleum regulators were locked in a dispute over control of the downstream petroleum market.

In June, the Dangote Group accused several international oil companies of undermining the plant’s operations by either withholding crude oil or providing it at inflated premiums compared to market prices.

Additionally, there have been clashes with Nigerian energy regulators, including the Nigerian Midstream and Downstream Regulatory Authority, which claimed that diesel from the refinery contained sulphur levels exceeding the permissible limit. The regulators also accused Dangote of attempting to establish a monopoly.

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In response, Mr Dangote invited lawmakers visiting the refinery to a laboratory on-site, where diesel from the refinery was tested against two imported samples. The results indicated that the refinery’s diesel had significantly lower sulphur content than the imported alternatives.

Last month, the Federal Executive Council (FEC) instructed NNPC Ltd to engage with the Dangote refinery and other local refineries to resolve the dispute regarding crude oil sales to these facilities.

Presided over by President Bola Tinubu, the FEC also directed that crude oil sales to refineries be conducted in naira, and that refineries in Nigeria should sell their refined products to the domestic market in naira as well.