In a significant move, the Federal Government announced on Monday that indigenous refineries in Nigeria now have the option to purchase crude oil using either the local currency, naira, or dollars. This decision marks a significant shift in policy and is in response to the demands of domestic crude oil refiners and other operators in the sector.
The declaration was made by the Nigerian Upstream Petroleum Regulatory Commission during a briefing held in Abuja. Alongside this announcement, the government also revealed that the total crude oil and condensate reserves in Nigeria had increased to 37.5 billion barrels as of January 1, 2024. This significant reserve comes with a life index of 68.01 years, indicating the projected duration of sustainable oil production at current rates.
The new template for domestic crude oil supply obligation was unveiled during the briefing, indicating a comprehensive framework for regulating the procurement of crude oil by indigenous refineries. This template is expected to streamline the process and provide greater flexibility for refineries to acquire the necessary crude oil inputs for their operations.
The decision to allow indigenous refineries to purchase crude oil in either naira or dollars is seen as a positive step towards promoting local refining capacity and reducing dependency on imported petroleum products. It is hoped that this move will incentivize investment in the domestic refining sector, leading to increased production capacity and enhanced energy security for the country.
This development aligns with the government’s broader objectives of promoting indigenous participation in the oil and gas industry, boosting economic growth, and fostering self-sufficiency in petroleum refining. By providing greater flexibility in crude oil procurement, the government aims to create a conducive environment for the development of a vibrant and sustainable refining sector in Nigeria.
