THE Crude Oil Refiners Association of Nigeria (CORAN) has revealed the reason why the domestic refineries, including the Dangote Petroleum Refinery, have yet to start uplifting crude in naira.

On July 29, Nigerian President Bola Tinubu directed the Nigerian National Petroleum Company Limited (NNPCL) to sell crude to Dangote Refinery and other upcoming refineries in naira, approving 450,000 barrels meant for domestic consumption for the Dangote refinery.

The directive which came following the Federal Executive Council (FEC) meeting was in a bid to intervene in the accusations and counter accusations between the Dangote refinery and the regulatory authorities in the oil sector over selling crude to the refinery.

The ICIR reports that management of the Dangote refinery has lamented not getting crude oil supply to its refinery, forcing the company to source crude from the United States another country for its 650,000-capacity nameplate refinery.

At a Channels Television programme on Wednesday, August 7, the publicity secretary of CORAN, Eche Idoko, said there is no refinery currently producing PMS in Nigeria.

He hinted that the reason why Dangote, Aradel, and other refineries have not activated their plant is because of the uncertainty around the regime of supplies, sales, and pricing of PMS.

He noted that should all the licensed refineries come on board, Nigeria would be able to produce about 1.3 million barrels per day (bpd).

“As it stands right now, none of our members that I know have started uplifting crude in naira,” Idoko said.

Idoko hailed the directive of the government but said there were still a few steps that have to be taken for it to become implementable.

According to him, there needs to be a regulatory framework that will enable local refineries to access crude through the naira, spelling out the quantity, pricing, supply, and other landing charges

“So, all the details are yet to be worked out. While it is a recent development, we will give the government the benefit of the doubt; we are hoping that in the coming days, they will be sitting down with us as stakeholders because you can’t shave a man’s head in his absence.

“We are hoping that we and our members will be part and parcel of the processes,” Idoko said

In terms of crude availability, in line with the Petroleum Industry Act, he hinted that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), working with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has gone ahead to put in place a domestic crude supply obligation guideline.

“What we are waiting for is for that guideline to be gazetted. We have extensively debated and participated with other stakeholders.

“So, we have a document that we think mirrors the minds of all of the stakeholders to an extent,” he said.

According to Idoko, the association does not yet know whether the document has been gazetted but was sure that the NUPRC could know.

“If that document, the crude domestic supply guideline, comes on stream it could aid those of our refineries that are producing now to begin to access crude under the (naira) regime as regards the incentive that should come to us.

“But as it stands right now none of our members are accessing crude yet under this regime and we are actually asking the government to expedite this action so that people can begin to reap the benefit of refineries operating in the country,” he submitted.

As refined petroleum products are anticipated from the Dangote refinery this August, it is yet uncertain whether it will bring down the pump price of petrol currently selling at over N1,000 in some parts of the states.

Issue on price drop

According to the CORAN secretary, it would be misleading to speak at this time about what percentage of petrol price will drop when the local refineries start getting crude supply from NNPCL, explaining that two issues are of concern.

“If we are going to deal in naira, are we going to still allow the regime of dollar floating or peg the price at a particular exchange rate in the dollar so that we sell in naira?

“So, when that is determined then we will be able to say this is the landing cost for crude oil in naira because if it is going to be an equivalent of the dollar in naira then we will be able to do our computation,” he said

Idoko believes that if sold in naira it will give a lot of reprieve to the naira against the dollar in the exchange rate market, and positively impact the end price at which it will be sold to retailers.

The ICIR can report that the removal of petrol subsidy by President Tinubu about a year ago has landed many Nigerians into further hardships, and the reversal is one of the demands of the youth-led struggle which started on Thursday, August 1.