NNPC to supply 385,000 barrels of crude oil daily to Dangote Refinery in naira starting October 1, improving local fuel availability and easing naira pressure.

The Nigerian National Petroleum Company (NNPC) will begin supplying 385,000 barrels of crude oil per day to the Dangote Refinery in naira starting October 1, 2024.

This initiative is part of the Federal Government’s plan to boost local refinery production, reduce pressure on the naira, and improve the availability of petroleum products.

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The Nigerian National Petroleum Company Limited (NNPC) will commence the supply of crude oil to the Dangote Petroleum Refinery in naira from October 1, 2024.

This marks the start of a significant shift in the domestic oil market, following approval by the Federal Executive Council (FEC) under President Bola Tinubu.

Zacch Adedeji, Chairman of the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency, confirmed that NNPC will supply approximately 385,000 barrels per day (bpd) to the refinery, with payments made in naira.

This arrangement will also see the refinery provide the Nigerian market with refined products like petrol and diesel, sold in naira, with diesel available to independent buyers and petrol exclusively sold to NNPC.

The move is expected to reduce pressure on the naira and eliminate unnecessary transaction costs. Additionally, it should enhance the availability of petroleum products throughout the country, as NNPC works closely with Dangote Refinery to ensure a seamless implementation of the new policy.

Adedeji stressed that all associated costs, including those from regulatory bodies like the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA), would also be settled in naira. A one-stop shop will be established to facilitate service coordination from regulatory and security agencies.

The $20 billion Dangote Refinery, located in Lekki, Lagos, recently started discharging petroleum products and will now play a key role in reducing Nigeria’s reliance on imported fuel.

The supply deal with NNPC will see around 11.5 million barrels of crude delivered monthly, significantly enhancing local refining capacity.

Meanwhile, modular refineries have called on the government to ensure that they are included in future crude supply deals, as many have faced difficulties due to irregular crude availability.

The Crude Oil Refinery-owners Association of Nigeria (CORAN) expressed concerns that the current arrangement only benefits Dangote Refinery, though they hope for future inclusion.

The modular refineries, some of which produce as little as 1,000 barrels per day due to crude shortages, argue that expanding the scheme to include all refineries could increase overall fuel production and reduce costs for consumers.

Despite this, they await further clarity on the crude supply process for smaller players in the refining sector.

As the crude supply deal approaches, Nigerians hope this initiative will stabilise fuel prices and ensure a steady supply of petroleum products.

The Dangote Refinery has refrained from announcing its petrol price, urging Nigerians to await a formal statement from the presidential committee overseeing the naira-based crude sale.

Despite earlier reports, the refinery denied selling petrol to NNPC at N898 per litre, calling such claims misleading.

The Federal Government has stated that it will not interfere in the pricing dispute between NNPC and Dangote, emphasising that the petroleum sector is now deregulated.

CBN has extended the suspension of cash deposit fees until March 31, 2025, to ease financial burdens on individuals and businesses.

The Central Bank of Nigeria has extended the suspension of cash deposit processing fees until March 31, 2025, easing costs for depositors.

The Central Bank of Nigeria (CBN) has announced an extension of the suspension on cash deposit processing fees until March 31, 2025.

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This decision, communicated in a letter signed by the Director of Banking Supervision, Adetona Adedeji, comes in light of the need to alleviate financial burdens on depositors.

This latest extension builds upon the previous suspension, initially set to expire on September 30, 2024.

The CBN’s directive also includes a suspension on cash deposits exceeding N500,000 for individuals and N3 million for corporate accounts, allowing customers to make significant cash deposits without incurring additional costs.

Prior to this announcement, the processing fee for individual accounts was 2% of the deposit amount, while corporate accounts faced a 3% charge.

The CBN aims to ensure that depositors can manage their cash without facing hefty fees, thereby encouraging more deposits and aiding financial inclusion.

In its letter, the CBN stated: “Further to our letter dated May 6, 2024, the Central Bank of Nigeria hereby extends the suspension of processing charges on cash deposits above N500,000 for individuals and N3,000,000 for corporates.”

The apex bank had previously introduced processing fees for cash deposits and withdrawals back in 2019 as part of its cashless policy initiative aimed at reducing cash circulation and enhancing government revenue collection.

Initially, these fees applied only to customers in select states, including Lagos and Ogun, but the CBN had plans to roll out the charges nationwide by March 2020.

The recent suspension aligns with the CBN’s ongoing efforts to promote a cashless economy and is designed to bolster confidence among depositors during a challenging economic climate.

Nigeria’s oil companies owe $6.175bn, with the government spending N15.8tn on fuel subsidies over the past decade, NEITI reports.

The liabilities of oil companies in Nigeria have reached $6.175 billion, with the government spending N15.8 trillion on fuel subsidies over the past decade.

As of June 2024, the liabilities of oil companies to the Nigerian Federation have escalated to $6.175 billion, according to a report released by the Nigerian Extractive Industries Transparency Initiative (NEITI).

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The report highlights that over the last decade, the Federal Government has expended a staggering N15.8 trillion on price differentials and under-recovery (subsidies) for the importation of approximately 200.85 billion litres of petrol.

Presented on Thursday in Abuja, the 2022/2023 oil and gas industry report reflects an extensive audit of the petroleum sector during the review period, as stated by NEITI Executive Secretary Dr. Orji Ogbonnaya.

He emphasised that this report is not merely a document but a “call to action,” underscoring the ongoing efforts to enhance transparency, accountability, and governance in Nigeria’s extractive sector.

The report noted that between 2006 and 2023, the total claims for under-recovery and price differentials amounted to N15.87 trillion, with 2022 recording the highest at N4.714 trillion.

Orji indicated that the report includes critical findings and recommendations aimed at identifying revenue leakages, improving compliance with regulatory frameworks, and increasing transparency within oil and gas operations.

An analysis revealed that the government significantly spent its resources on petrol subsidies between 2014 and 2023, coinciding with a yearly surge in petrol imports, which exacerbated subsidy costs.

In 2023, the government allocated N3.01 trillion for petrol subsidies, a decrease from the N4.71 trillion spent in 2022.

The report disclosed that Nigeria imported 23.54 billion litres of Premium Motor Spirit (PMS) in 2022, which dropped to 20.28 billion litres in 2023, marking a 14% decline following the removal of the subsidy.

A detailed trend analysis showed that the highest annual PMS importation occurred in 2022, while the lowest was recorded in 2017, with a total of N15.87 trillion claimed as under-recovery between 2006 and 2023.

A breakdown of subsidy expenditures indicated that N480 billion was spent on importing 18.93 billion litres of fuel in 2014, decreasing to N320 billion for 19.27 billion litres in 2015.

In 2016, N100 billion was spent for 18.76 billion litres, while N140 billion was allocated for 16.88 billion litres in 2017. However, in 2018, subsidy costs surged to N720 billion for the importation of 20 billion litres, later decreasing to N580 billion in 2019.

By 2021, the government expended N1.16 trillion on 22.54 billion litres, followed by N4.71 trillion for 23.54 billion litres in 2022, and N3.01 trillion for 20.28 billion litres in 2023.

The report also identified liabilities owed to the federation, including $6.071 billion and N66.4 billion in unpaid royalties and gas flare penalties as of August 31, 2024, alongside outstanding taxes owed to the Federal Inland Revenue Service totalling $21.926 million and N492.8 million as of June 2024.

In response to these revelations, EFCC Chairman Olanipekun Olukayode pledged to recover the $6 billion and N66 billion owed to the federation, announcing the transfer of over N1 billion from previous NEITI audits into the Federation Account.

He underscored the EFCC’s commitment to pursuing recommendations from the NEITI report, especially concerning financial violations.

George Akume, Secretary to the Government of the Federation, assured stakeholders of the government’s continued support for NEITI’s independence, emphasising the significance of its mandate in promoting transparency in Nigeria’s extractive sector.