Fuel Prices Could Decrease as FEC Revives Naira-for-Crude Agreement
Fuel Prices Could Decrease as FEC Revives Naira-for-Crude Agreement
Nigerian oil marketers have announced that a significant reduction in petrol prices is on the horizon, thanks to the Federal Government’s initiative to sell crude and refined products using the naira. This development comes in conjunction with expectations that the Dangote Refinery will lower its petrol loading costs by week’s end, further driving down fuel prices.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, confirmed the anticipated price drop, attributing it to the recent directive by the Federal Executive Council (FEC) to fully implement the naira-for-crude agreement. However, he refrained from specifying how much prices would decrease, as the pricing details for government-issued products remain unclear.
Eche Idoko, representative of the Crude Oil Refinery-owners Association of Nigeria, urged increased participation from local refiners, emphasizing that a broader array of players would enhance the initiative’s economic benefits. The FEC’s directive, which follows an earlier suspension, signals a commitment to sustainable local refining.
The finance ministry revealed that the sale of crude oil and refined products in naira commenced on October 1, 2024, aiming to reduce reliance on US dollars and stabilize prices. Previously, the Dangote refinery had temporarily halted naira sales due to a mismatch between naira sales proceeds and dollar-denominated crude purchase obligations, leading to a spike in fuel prices.
Despite this setback, various stakeholders expressed optimism regarding the reinstatement of the naira-for-crude policy. Hammed Fashola, Vice President of IPMAN, described the move as beneficial for price stability in Nigeria, predicting that consumer fuel prices would soon decrease. With the government back on track with this initiative, the outlook for Nigerian fuel consumers appears promising.
