Sale of crude oil to local refiners in naira has commenced, the federal government has confirmed, raising expectations of lower fuel costs from Nigerians.
But experts expressed mixed feelings over the development saying Nigerians should not raise their hope too high.
Minister of Finance and Coordinating Minister for the Economy, Wale Edun had shared the news about the commencement of crude oil sale in naira in a statement.
Daily Trust reports that President Bola Tinubu had directed the sale of crude oil to Dangote in naira as part of move to bring down the cost of premium motor spirit (pms) otherwise known as petrol.
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Dangote had earlier rolled out petrol products from its 650,000-barrel refinery in Ibeju-Lekki Lagos but many Nigerians were disappointed that this did not bring down the price of PMS.
The Nigerian National Petroleum Company Limited (NNPCL) had fixed a litre of Dangote PMS at N950 in Lagos claiming it purchased the product at N898 per litre from Dangote.
Dangote had also dismissed the statement and said the price would further reduce after the commencement of crude sales in naira from the NNPCL.
The Minister of Finance in a statement confirmed that “Nigeria has officially commenced the sale of crude oil and refined petroleum products in Naira.”
The statement stated that in line with the directive of the Federal Executive Council (FEC), the sale of crude oil and refined petroleum products in Naira officially commenced as of October 1,2024.
The statement said, “Following a meeting of the Implementation Committee, Chaired by the Honourable Minister of Finance and Coordinating Minister of the Economy to conduct a post-commencement review of the Crude Oil and Refined Products Sales in Naira initiative, the commencement of this strategic initiative was affirmed by key stakeholders”,HM Edun disclosed.
It stated that the “The strategic initiative and bold step taken by the President Bola Tinubu-led Administration is expected to have a lasting impact on Nigeria’s economy, fostering growth, stability, and self-sufficiency, especially as the country continues to navigate the complexities of global markets, this strategic move positions Nigeria for success in the years to come.”
Oil and gas industry analyst, Dr. Ayodele Oni predicted that the development might reduce the pressure on naira by 40%.
“I am of the view that it would reduce the pressure on the Naira by around 40% and could generally keep the Naira a bit more stable.
“In terms of pricing, I don’t see a lot of difference unless crude prices go down or the government provides some form of subsidy,” he said.
On his part, Emeka Onyegbule said he doesn’t see the move substantially reducing fuel prices, citing the high cost of production.
“The cost of production in Nigeria is probably the highest in Africa. I really don’t see anything happening except we want Dangote to sell at a cost recovery price. I don’t expect something manufactured in Nigeria to be cheaper than the one manufactured in Europe.”
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