Contrary to recent reports, the naira-based crude oil supply arrangement with local refineries has not been discontinued.
The Chairman of the Technical Sub-Committee, Zacch Adedeji, has confirmed that the policy framework enabling the sale of crude oil in naira for domestic refining remains in force.
“We wish to provide an update on the Federal Executive Council initiative and confirm that the Naira-Based Domestic Sales Framework remains in place.
“The initiative was designed to ensure supply stability and optimize the utilization of local refining capacity.” said Adedeji
The initiative, which has been in place for several months, has shown positive results, with evidence indicating that it is the right approach to support the economy.
Adedeji emphasized that 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,” Adedeji explained.
The engagement process for crude oil supply to domestic refineries also remains in place, with structured agreements balancing factors like availability, demand, and market conditions.
Adedeji reassured that local refineries have not been excluded from domestic crude supply, with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.
“The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act,” said Adedeji. “This ensures that local refineries have access to domestic crude, supporting their operations and growth.”
The framework for domestic crude transactions is designed to promote a competitive and efficient pricing environment.
Adedeji highlighted the importance of this aspect, stating that it supports the overall objectives of the initiative.
“The framework promotes a competitive and efficient pricing environment, which is essential for the growth and development of local refineries,” Adedeji said.
The Technical Sub-Committee remains committed to ensuring the efficient execution of this initiative, in line with its core objectives – enhancing local refining, reducing foreign exchange exposure, and stabilizing the domestic fuel supply.
“We remain committed to ensuring the efficient execution of this initiative, supporting the growth of local refineries and the Nigerian economy,” Adedeji concluded.
