FG Confirms Deregulation Of Down Stream Oil Sector

With Nigeria’s downstream oil sector fully deregulated, the Federal Government has said petroleum product marketers are now able to purchase PMS directly from local refineries without the intermediary role of Nigeria National Petroleum Limited ( NNPL)..

In a statement issued by the Minister of
Finance and Coordinating Minister
of the Economy, Mr Wale Edun, Oil marketers “Are encouraged to initiate direct purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency”.

Edun who doubles as Chairman Implementation Committee of crude purchase and product sales in naira transaction affirmed the kick off of the deregulation policy of oil sector.

Edun’s declaration was a fall out of committee’s second post-commencement review held on 10th October, 2024, which evaluated the progress of the crude oil and refined products sales in the naira initiative.

“The Committee is pleased to report a successful transition of operations in line with the directive issued by the Federal Executive Council (FEC).

“This directive has established a robust framework for local production and distribution of crude oil and refined products for local consumption in Naira.

“With this mechanism now in full operation, along with the commencement of local production, we are well-positioned to transition to a fully deregulated market for all petroleum products”.

“Moving forward, petroleum product marketers are now able to purchase PMS directly from local refineries without the intermediary role of NNPC. Marketers are encouraged to initiate direct
purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency”, it said.

The committee was optimistic and confident that, in the long term, these measures will create better market conditions for the benefit of all Nigerians.

The government had last week hinted at flagging off sale of crude oil in naira. This was disclosed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, in a statement last Saturday.

The sale of crude oil to the 650,000 bpd refinery was initially approved by the Federal Executive Council (FEC) in July, with transactions set to begin this month.

In a post on the official X account of the Ministry, the government confirmed that it had commenced sales of crude to local refineries in naira as of October 1.

“The Hon. Minister of Finance and Coordinating Minister of the Economy announced that, in line with the Federal Executive Council (FEC) directive, the sale of crude oil and refined petroleum products in Naira has officially commenced as of October 1st, 2024

Following a meeting of the Implementation Committee, chaired by the Hon. Minister of Finance and Coordinating Minister of the Economy on October 3rd, 2024, to conduct a post-commencement review of the Crude Oil and Refined Products Sales in Naira initiative, the commencement of this strategic initiative was affirmed by key stakeholders,” the statement read.

Edun also affirmed that the stakeholder meeting was attended by the Hon. Minister of State, Petroleum (Oil), Heineken Lokpobiri, the Vice President of Dangote Group, Edwin Devakumar, NNPC boss, Mele Kyari, among others.

“The meeting included the Hon. Minister of State, Petroleum (Oil), the Special Adviser to the President on Revenue, the Special Adviser to the President on Energy, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the representative of the Chairman of Dangote Group, the Vice President of Dangote Group, and the management of the Nigerian National Petroleum Company (NNPC), led by the Group Chief Executive Officer (GCEO), Chief Financial Officer (CFO), and Executive Vice President (Downstream),” the statement added.