Following the scarcity of foreign exchange in the country, the Nigerian National Petroleum Corporation (NNPC) has said it is planning to allow refinery owners to pay in local currency.
Gatekeepers News reports that the NNPC’s Chief Operating Officer, Refineries and Petrochemicals, Mustapha Yakubu explained that some completed private refineries are yet to commence production because they were yet to conclude with the national oil company on the procurement of feedstock for their refineries.
Yakubu noted that ordinarily, crude oil is sold in foreign currency, but due to the volatility of foreign exchange, NNPC has arranged to sell crude to private refineries in naira.
“Today, they have a challenge. Some of them constructed refineries today they cannot start because we are discussing how to allocate crude to them. We are asking them to pay in foreign exchange.
“You know what is happening to foreign exchange: volatility. So, we have to find a common ground so there is a discussion in that regard to allow them pay in local currency,” he said.
Gatekeepers News reports that Yakubu stated that the Corporation is in talks with the private investors in the refining business because it is possible for the investors to build refineries without having feedstock, crude or condensate to refine, while the raw material belongs to the government.
“Whatever they do, they have to work within certain regulations. Refineries are not bakeries. I can go to Wuse market and buy flours. But for those refineries you need feedstock whether crude or condensate.
“This crude belongs to government, so there is need for collaboration. We need to support them. Because you can build refinery and there is no crude. What happens? Their partners (banks) will be running after them.
“Government needs to make money from this crude oil. A lot of sectors need money. The health sector needs money.
“There should be that assurance that if I give you crude you have to pay for it and you need to also deliver the balance.
“The investors that are building refineries today we have to collaborate that is the way we can encourage them,” he added.
