Connect with us

Crude Oil

Federal Government to Initiate Naira-Based Crude Sales to Dangote Refinery Starting October 1

Published

on

Crude Oil

The Federal Government of Nigeria has announced that it will begin selling crude oil to the Dangote Refinery in naira, effective from October 1, 2024.

This was confirmed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during a high-level meeting with the Implementation Committee in Abuja.

The meeting, which took place on Monday, was held to evaluate the progress of several key initiatives, including the transition to naira payments for crude oil.

According to an official statement released by the Ministry of Finance on its X (formerly Twitter) page, the shift to naira-based transactions is part of a broader strategy to strengthen the domestic currency and reduce Nigeria’s dependency on foreign exchange in its oil trade.

“The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, today led the Implementation Committee meeting on the transition to crude oil sales in naira. The meeting reviewed progress on key initiatives, including the upcoming commencement of naira payments for crude oil sales to the Dangote Refinery starting October 1, 2024,” the statement read.

This policy marks a significant departure from the traditional practice of selling crude oil in U.S. dollars, a move expected to have far-reaching implications for the Nigerian economy.

By transacting in naira, the government aims to stabilize the currency, manage inflation, and improve the liquidity of the naira in the global market.

The Dangote Refinery, which is set to become one of the largest single-train refineries in the world, is expected to play a crucial role in Nigeria’s energy sector.

The refinery’s operations will significantly reduce the country’s dependence on imported petroleum products, thereby conserving foreign exchange and promoting local economic growth.

Key stakeholders involved in the implementation of this policy include the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the Central Bank of Nigeria, the Nigerian Upstream Petroleum Regulatory Commission, and the African Export-Import Bank.

These bodies are tasked with ensuring a seamless transition to the new payment system and supporting the operational success of the Dangote Refinery.

Also, Zacch Adedeji, the Executive Chairman of the Federal Inland Revenue Service (FIRS), highlighted that the first delivery of Premium Motor Spirit (PMS) from the Dangote Refinery is expected as early as next month, in alignment with existing agreements.

This delivery will mark the beginning of a new era in Nigeria’s oil industry, where local content and currency play a more prominent role.

The government’s decision to sell crude oil in naira to the Dangote Refinery is seen as a strategic move to enhance the refinery’s integration into the national economy while also providing a buffer against external economic shocks.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Continue Reading
Comments

Crude Oil

Rivers State Governor Refutes Claims of NNPCL Shutdown, Labels Report as ‘Propaganda’

Published

on

The Governor of Rivers State, Siminalayi Fubara has denied shutting down the Nigerian National Petroleum Company Limited (NNPCL), and other oil companies in the state as retaliation to a Federal High Court’s ruling barring the release of allocations to the state as widely reported.

Shortly after the court’s ruling, a report claiming that Fubara had ordered the immediate closure of NNPC and other oil companies in the oil rich state emerged on social media.

The report alleged that the Rivers State Governor declared that if the government fails to reverse the court ruling, there will be no oil for the country from Rivers.

Reacting to the allegation via a statement signed by the Commissioner for Information and Communications, Warisenibo Joe Johnson, the Rivers government said the report is not only false but a concocted propaganda from the enemies of the state.

The government urged Rivers people to ignore the report, adding that Fubara is committed to the rule of law and does not rely on unconventional and crude approaches to respond to matters of governance.

The statement reads, “The attention of Rivers State Government has been drawn to a spurious news item circulating on social media on “Gov. Siminalayi Fubara shutting down NNPCL and all oil companies in Rivers State”.

“The report was not only false, but a concocted propaganda from the imagination of the author and enemies of the State. The story was also circulated by an inconsequential and unverified medium

“Governor Siminalayi Fubara is committed to the rule of law and does not rely on unconventional and crude approaches to respond to matters of governance.

“We therefore enjoin Rivers people and well-meaning Nigerians to discountenance the spurious and fake report as Governor Fubara at no time contemplated and/or directed such needless order of shutting down the economy for any reason.”

Investors King reported that a Federal High Court in Abuja on Wednesday, restrained the Central Bank of Nigeria (CBN) from releasing monthly allocations to the Rivers State Government.

The judge, Joyce Abdulmalik, in a judgement, held that the receipt and disbursement of monthly allocations since January 2024 by Governor Siminalayi Fubara of Rivers State is a constitutional somersault and aberration that must not be allowed to continue.

Abdulmalik submitted that the presentation of the 2024 budget by Fubara before a four-member Rivers State House of Assembly was an affront to the constitutional provision.

Continue Reading

Crude Oil

Possible Iran Attack on Israel Boost Oil Prices

Published

on

Crude oil

Oil prices recorded a rise in the international market on reports that Iran is preparing to attack Israel again, adding to tensions in the Middle East.

Brent crude rose by $2.10 or 2.91 percent to $74.26 while the US West Texas Intermediate (WTI)  jumped $2.15 or 3.13 percent to $70.76.

Iran is preparing to attack Israel from Iraqi territory in the coming days, possibly before the US presidential election on November 5.

The attack is expected to be carried out from Iraq using a large number of drones and ballistic missiles as attacking through pro-Iran militias in Iraq could be an attempt by Iran to avoid another Israeli attack against strategic targets in the country.

Israel and Iran have engaged in a series of military strikes, part of broader Middle East warfare set off by fighting in Gaza.

Iran had said it would use all available tools to respond to strikes carried out by Israel after Israel’s military jets struck missile factories and other sites near Tehran and in western Iran in retaliation for the country’s October 1 barrage of more than 200 missiles against Israel.

This renewed tension raises worries for the market as Iran is a member of the Organisation of the Petroleum Exporting Countries (OPEC) with production of around 3.2 million barrels per day or 3 per cent of global output.

There were worries that Israel could target Iran’s nuclear facilities but it only attacked just military targets near energy facilities and that eased earlier this week. Now, another retaliation could create provocation that would see them attack the infrastructure.

Market analysts noted that damage to air defences on Iran’s energy infrastructure has increased their vulnerability to future attacks.

Prices also continued to gain on reports that OPEC could delay its planned oil output increase as the wider OPEC+ is scheduled to meet on December 1 to decide its next policy steps.

Meanwhile, in China, the world’s biggest oil importer, manufacturing activity expanded in October for the first time in six months, suggesting stimulus measures are having an effect.

Continue Reading

Crude Oil

Oil Prices Rise 2% on Positive Crude Inventories Data, Tight Supply Expectations

Published

on

Crude oil gains

Oil prices rose more than 2 percent on Wednesday after data showed crude and inventories fell unexpectedly last week and reports that the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ may delay a planned oil output increase.

Brent crude futures settled up $1.43, or 2.01 percent, at $72.55 a barrel and the US West Texas Intermediate (WTI) crude rose $1.4, or 2.08 percent to $68.61.

The US Energy Information Administration (EIA) reported an inventory draw of a modest half a million barrels for the week to October 25.

The change in oil stocks compared with a build of 5.5 million barrels for the previous week, pressured oil prices at the time.

The American Petroleum Institute (API), meanwhile, on Tuesday reported estimated inventory draws across crude and fuels, helping prices move higher for a time. However, they remained subdued due to expectations of a ceasefire in the Middle East.

The country’s petrol stocks shed 2.7 million barrels in the week to October 25, with production at an average of 9.7 million barrels daily. These figures compared with an inventory build of 900,000 barrels for the previous week, when production stood at an average of 10 million barrels daily.

Pressure also came as the market learned that OPEC+ could delay a planned oil production increase in December by a month or more because of concern over soft oil demand and rising supply.

Traders are betting that OPEC+ will hold off on the planned increase, deferring to Saudi Arabia’s top-down approach since the country acts as the de facto leader of the group and has always stepped in to help the alliance when it is underperforming.

The group is scheduled to raise output by 180,000 barrels per day in December. OPEC+ has cut output by 5.86 million barrels per day, equivalent to about 5.7 per cent of global oil demand.

OPEC Monthly Oil Market Report downgraded demand growth for 2024 to 1.9 million barrels per day while demand forecasts for 2025 slipped another 102,000 barrels per day to 1.6 million barrels per day.

China, meanwhile, ramped up imports by 16 per cent month over month in August, but the rise still falls short of August 2023 levels, keeping a lid on demand and by extension, the market.

OPEC+ is scheduled to meet on December 1 to decide its next policy steps.

Continue Reading
Advertisement
Advertisement




Advertisement
Advertisement
Advertisement

Trending