The Independent Petroleum Producers Group (IPPG) has warned that the Nigerian government’s decision to sell crude oil in naira to local refineries could worsen the country’s foreign exchange (FX) crisis.
The caution, issued by IPPG Chairman, Abdulrasaq Isa in a letter to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), urges authorities to proceed with caution.
This warning follows the Federal Executive Council’s approval of the Nigerian National Petroleum Company (NNPC) Ltd’s plan to sell crude to domestic refineries in naira from October 1.
While the policy aims to reduce Nigeria’s monthly FX expenditure on petroleum imports from $660 million to $50 million, potentially saving $7.32 billion annually, IPPG argues that it violates existing laws and could destabilise the naira.
Isa emphasized that the policy threatens Nigeria’s FX revenue from the oil and gas sector, impacting government income from royalties and taxes.
He also highlighted concerns over the NUPRC’s domestic refining requirements and the challenges they pose for producers.
