The Nigerian National Petroleum Corporation, NNPC’s Chief Operating Officer, Refineries, Mustapha Yakubu, stated at the recently completed 2021 Nigerian Oil and Gas (NOG) conference in Abuja that several private refineries had yet to begin operations due to crude supply issues.
During the panel’s discussion on “What strategies in the mid and downstream sectors will take Nigeria closer to energy self-sufficiency?”, he explained that the NNPC has been unable to reach an agreement with refineries on crude procurement due to the volatility of the foreign exchange market. According to him, crude oil is sold in foreign currency, but the NNPC is working on getting investors to pay in the local currency.
He said: “We are asking them to pay in foreign exchange. You know what is happening to foreign exchange today: volatility. So, we have to find a common ground.”
“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 the government so there is a need for collaboration. We need to support them. Because you can build a refinery and there is no crude. What happens? The partners 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 if I give you crude you have to pay for it and you need to also deliver the balance.”