Market pricing of petrol, FX setting Nigerian economy on industrialisation path

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has revealed that the country’s bold initiative to sell crude oil to local refiners, who then sell petroleum products in Naira, is yielding positive results.

Mr Edun disclosed this at a meeting with President Bola Tinubu on Tuesday.

He said this initiative, made possible by Mr Tinubu, has enabled market pricing of petroleum products and foreign exchange, thus creating room for industrial development.

“This initiative, which was initiated by Mister President, is made possible also by courageous and bold investment also of the Dangote group, in a local refinery of 650,000 barrels per day refining capacity to date,” Mr Edun said.

“The implementation committee and the sub-committee have worked assiduously with all stakeholders, the regulators, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Maritime Administration and Safety Agency, (NIMASA), the Nigeria National Petroleum Company Limited (NNPC), Nigerian Ports Authority (NPA) the Navy and a host of other stakeholders to ensure that this important initiative is implemented, and it is being implemented as we speak, and what it has made possible is that now we have market pricing of petroleum products.

“And relatedly, we have market pricing of foreign exchange that has set the economy on the path to industrialisation, because with private sector refining of crude oil, we now have raw materials, not just for agriculture, but for industry, for chemicals, for paints, for building materials for textiles, and of course, this is Mr President’s strategy and his policy of making conditions right for the private sector to invest, create jobs and grow the economy.”

The minister noted that the market pricing of petroleum products has also paved the way for NNPC to restore its balance sheet, restore its financial fortunes, and give the federation more funding to allow governments to meet their obligations.

He explained that salary payments to workers, social services to the population generally, and key infrastructure development, have been made possible by the pricing mechanism put in place.

Mr Edun explained that the economy has been set well and truly on an industrial path, although it is still taking its early steps, and there is much to be done.

“But we can now see a clear path to industrial development for modernisation of the Nigerian economy, because the key prices are right, and it is encouraging private sector investment.

“On that note, I believe that what happened in the meeting was that all committed to ensuring that this all-important effort is sustained and that whatever the teething problems, whatever the initial obstacles to the successful implementation of the local sale in Naira of crude petroleum to domestic refiners and the and the correlating sale of petroleum products in Naira is fully achieved,” he added.

Mr Edun said the meeting reviewed the progress of the initiative to ensure that the initial obstacles to the successful implementation of the sale of crude in naira to domestic refiners and the correlating sale of petroleum products in naira were overcome.

He said AfreximBank was part of the meeting and the bank is one of the financial institutions that will assist as intermediaries to ensure that the parties, the seller of the crude and the buyer of the crude, can complete their transactions, irrespective of the volatility in the market.

In July, the Federal Executive Council (FEC) directed NNPC Ltd to engage the Dangote refinery and other local refineries to resolve the dispute over the sale of crude oil to them.

In October, the Nigerian government said it had officially commenced the sale of crude oil and refined petroleum products in Naira.

The sale in Naira took effect from 1 October, the government said at the time.