…Approves use of NNPC dividends for petrol subsidy
The Federal Government will, on October 1, begin crude oil sales to Dangote refinery in naira, according to the latest information from the Ministry of Finance.
This is a significant step towards ensuring the speedy realisation of the Presidential Directive on Crude Oil Sales in Naira with a view to enhancing Nigeria’s economic growth and development.
This was one of the decisions taken in Abuja on Monday during a crucial meeting of the Federal Government’s Implementation Committee on Crude Oil Sales in Naira, presided over by Wale Edun, minister of finance and coordinating minister of the economy.
Read also: FG to start naira-based crude sales to Dangote Refinery on October 1
“The Committee reviewed progress on key initiatives, including the upcoming commencement of Naira payments for crude oil sales to the Dangote Refinery starting from October 1, 2024, marking a significant milestone in Nigeria’s economic transformation,” the finance ministry said in a statement, signed by Mohammed Manga, who is the director of information and public relations.
The finance minister emphasised the need for transparency and directed the Technical Sub-Committee to finalise details as well as prepare a report for the President, confirming that his directives are on track for implementation from September.
He was optimistic that the collaboration among stakeholders, including regulatory bodies and financial institutions, will ensure a transparent and efficient implementation process, as Nigeria goes through a seamless transition to crude oil sales in Naira.
At the meeting Zacch Adedeji, chairman, Federal Inland Revenue Service (FIRS) and Chairman of the Technical Sub-Committee, reported that the first PMS delivery from Dangote is expected next month under the existing agreements.
Key roles were outlined for stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Central Bank of Nigeria (CBN), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the African Export-Import Bank (Afreximbank), to ensure smooth implementation.
Updates on the Port Harcourt and Dangote refineries were also provided, with significant production increases expected from November 2024.
Read also: Dangote refinery is transforming Nigeria Into an Oil Market Juggernaut says Bloomberg
Also, President Tinubu granted approval for the Nigerian National Petroleum Company (NNPC) Limited to use the 2023 final dividends owed to the federation to cover the cost of petrol subsidies.
In addition, the president approved a halt on the payment of 2024 interim dividends to the federation to help boost NNPC’s cash flow.
Also, NNPC informed the president that, due to the subsidy payments, it is currently unable to pay taxes and royalties into the federation account, referring to this as a ‘subsidy shortfall/FX differential.’
A forecast from NNPC, obtained by BusinessDay, indicated that the total petrol subsidy expenses from August 2023 to December 2024 will amount to N6.884 trillion, leaving the company unable to remit N3.987 trillion in taxes and royalties to the federation account.
The exact dividend that would be withheld or put on hold could not be verified at the time of filing this report.
