NECA Applauds Federal Government-Dangote Refinery Deal to Tackle Fuel Scarcity
The Nigeria Employers’ Consultative Association (NECA) has praised the recent agreement between the Federal Government and Dangote Refineries on the sale of Premium Motor Spirit (PMS) to the Nigerian National Petroleum Corporation Limited (NNPCL). The association hailed the deal as a significant step towards ending the country’s perennial fuel scarcity and easing pressure on foreign exchange demand.
In a statement issued by the association, NECA’s Director-General, Mr. Adewale-Smatt Oyerinde, lauded the landmark pricing agreement that facilitated the lifting of petrol from the Dangote Refinery.
“This singular event has the potential to transform the recurring fuel scarcity in the country and relieve the ongoing pressure on the naira,” Oyerinde stated.
While acknowledging that the current pump price of petrol remains higher than expected due to the purchase of crude oil in dollars, Oyerinde expressed optimism that the crude-for-naira scheme, set to commence on October 1, would eventually drive down fuel prices at the pump. He further highlighted the broader economic implications of the agreement, suggesting it would bring significant benefits not just to the government but also to businesses and ordinary Nigerians.
“This new direction will not only be advantageous for the Government but will also have a profound impact on the business community and the Nigerian populace at large,” Oyerinde asserted.
Economic Impact and Industry Implications
The NECA chief also pointed out that the agreement would help moderate fuel costs, reduce long queues at filling stations, and provide vital support for small businesses reliant on energy. Additionally, he praised the government’s plan to establish a “one-stop shop” to streamline the interests of all stakeholders, including regulatory and security agencies, ensuring a smooth rollout of the initiative.
“A one-stop shop would not only expedite approvals for lifting refined products but also prove cost-effective in the long run,” Oyerinde said.
He drew parallels with challenges in the domestic gas market, where prices for gas sold to local industries are pegged to the US dollar. According to Oyerinde, this has resulted in severe production setbacks, particularly in the manufacturing sector, which has been hampered by limited access to foreign exchange and instability in the naira.
Oyerinde urged the Federal Government to adopt a similar strategy in the gas sector, advocating for gas prices to be benchmarked in naira to support local industries, especially manufacturers.
The move follows the Federal Executive Council’s approval on July 29 of a proposal from President Bola Tinubu directing the NNPCL to sell crude oil to Dangote Refinery and other refineries in naira—a measure designed to stabilise domestic fuel supply and protect the local currency.
