Modular refinery operators in Nigeria have expressed frustration over their exclusion from the federal government’s naira-for-crude oil initiative, a policy designed to bolster local refining by allowing domestic crude purchases in the local currency. While the Nigerian National Petroleum Company Limited (NNPC) and Dangote Refinery are reportedly in talks to extend their naira-based crude supply agreement, smaller modular refineries claim they have been sidelined.
The Crude Oil Refiners Association of Nigeria (CORAN) has criticized the Technical Sub-Committee on the Crude and Refined Product Sales in Naira for not including modular refineries in the deal. They argue that this exclusion undermines the policy’s goal of enhancing local refining capacity and reducing reliance on imported petroleum products.
“The policy framework enabling the sale of crude oil in naira for domestic refining remains in force,” stated Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS). “There is no exclusion of local refineries from access to domestic crude. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.”
Despite these assurances, modular refinery operators report difficulties in accessing crude oil under the naira-for-crude scheme. They contend that the current implementation favors larger refineries, leaving smaller operators without the necessary resources to sustain operations.
The federal government has reiterated its commitment to the naira-for-crude policy, emphasizing its role in stabilizing the domestic fuel supply and reducing foreign exchange exposure. However, the ongoing challenges faced by modular refineries highlight the need for more inclusive measures to ensure equitable access to crude oil for all domestic refiners.
As discussions continue between NNPC and Dangote Refinery, stakeholders urge the government to address the concerns of modular refinery operators to achieve the broader objectives of the naira-for-crude initiative.
SOURCE: Punch