Economy

Forex crisis threatens modular refineries N25bn daily crude input

Published

3 years ago

February 26, 2024

/home/naijuinz/public_html/wp-content/plugins/mvp-social-buttons/mvp-social-buttons.php on line 27
https://naijablitznews.com/wp-content/uploads/2024/02/Modular-refinery.jpg&description=Forex crisis threatens modular refineries N25bn daily crude input', 'pinterestShare', 'width=750,height=350'); return false;" title="Pin This Post">

/home/naijuinz/public_html/wp-content/plugins/mvp-social-buttons/mvp-social-buttons.php on line 72
https://naijablitznews.com/wp-content/uploads/2024/02/Modular-refinery.jpg&description=Forex crisis threatens modular refineries N25bn daily crude input', 'pinterestShare', 'width=750,height=350'); return false;" title="Pin This Post">

ADVERTISEMENT

Modular refineries in Nigeria are currently facing the threat of shutting down operations following their inability to access foreign exchange for the purchase of crude oil, a commodity priced in United States dollars.

Nigeria has 25 licenced modular refineries with a combined capacity of producing 200,000 barrels of crude oil daily.

Although not all of the plants are currently operational, it was gathered that the functional ones were increasingly finding it difficult to purchase crude due to the worsening foreign exchange crisis in the country.

Brent, the global benchmark for crude, traded at about $80/barrel on Sunday and had remained within that range for months.

With an estimated capacity of 200,000bpd, the modular refineries, if fully operational, would refine about $16m (or N25.14bn if Thursday’s official closing rate of N1,571/dollar is used.”

Annually, it means the modular refineries has capacity for about 73 million barrels annually, representing about $5.84bn worth of crude oil.

But the facilities, which produce Automotive Gas Oil, popularly called diesel, Dual Purpose Kerosene or kerosene, naphtha and black oil, are now finding it hard to make the refined products available to oil marketers for distribution to consumers.

They explained that the scarcity of dollars had made it almost impossible for operators to purchase crude oil, as the modular refinery players and oil marketers demanded for the sale of crude oil in naira from the Federal Government.

The modular refinery operators, who spoke under the aegis of Crude Oil Refinery Owners Association of Nigeria, also lamented that the Federal Government had not been able to keep its part of the bargain with respect to the provision of feedstock to local crude oil refiners.

Speaking with our correspondent on the matter, the Publicity Secretary, Crude Oil Refinery Owners Association of Nigeria, Eche Idoko, stated that modular refineries may close shop if nothing is done to ameliorate the situation.

CORAN is a registered association of modular and conventional refinery companies in Nigeria, while modular refineries are simplified refineries that require significantly less capital investment than traditional full-scale refineries.

Idoko said, “The purchase of crude oil in dollars is currently the major challenge to modular refineries. We buy crude in dollars and sell our refined products in naira, and this is a major challenge. And apart from that, where do you get the dollars to pay for the crude?

“You heard the Manufacturers Association of Nigeria crying out recently about the dollar saga. We have requested that crude oil be sold to us in naira. And when you do this, you ease the pressure on the naira and this will make our diesel cheaper.

“It will encourage more investors to build and patronise the local refineries. If you take petroleum products off the foreign exchange market, you would have helped the naira by 60 per cent.”

Asked whether the inability of modular refineries to source dollars for crude oil purchase was slowing down production at the plants, Idoko replied, “Yes. We’ve not been able to get enough crude and from the little that we see, we’ve not been able to get forex to buy them.”

On whether this posed a threat to the survival of the plants, the spokesperson of the group said, “Exactly, it is a threat to our existence and it also opens the country to the volatility in the international market.”

Although the association could not state the estimated volume of crude refined by modular refineries in Nigeria, it stated that operators in the sector could refine about 200,000 barrels daily if all of them were operating.

Idoko said, “Right now, I don’t have the actual volume of crude that modular refineries refine annually. However, it is important to state that what each refinery produces in a month is dependent on the amount of crude they are able to get.

“The government has not been able to fulfill its own side of the obligation by providing 60 per cent of the crude required by modular refineries, as captured in the Petroleum Industry Act. So a lot of modular refineries are performing below capacity.

“For instance, OPAC has a 10,000 barrels per day installed capacity, but the most they have been able to refine is like 3,000 to 4,000bpd. The Edo refinery has 1,000bpd, but sometimes they do just 500bpd. Aradel and Waltersmith are the ones that refine as much as 70 and 80 per cent of their capacities because they have their own marginal fields.

“Waltersmith has a capacity of 5,000bpd, while Aradel has 10,000bpd refining capacity. However, if all the modular refineries come onstream, all those that have been licensed so far, our crude demand would be about 150,000bpd and 200,000bpd.”

Nigeria currently has 25 licensed modular refineries. Five of them are operating and producing diesel, kerosene, black oil and naphtha. About 10 are under various stages of completion, while the others have received licences to establish.

Officials of the Federal Ministry of Petroleum could not be reached to tell whether the government would consider selling crude to the modular refineries in naira, as they had yet to respond to enquiries up till when this report was filed.

However, the Minister of State for Petroleum Resources, (Oil), Heineken Lokpobiri, recently confirmed the lack of crude to domestic refiners, noting that Nigeria’s inability to meet its crude oil production quota approved by the Organisation of Petroleum Exporting Countries was the major limiting factor.

Lokpobiri, however, stated that the government was working hard to meet the production quota in order to supply crude oil to local refiners as stipulated in the Petroleum Industry Act.

Meanwhile, Idoko noted that “the current NNPC boss, petroleum minister and NUPRC have all talked about the possibility of having some arrangements with us in naira. But that hasn’t been implemented. Our people still source crude from domestic producers in dollars.

“We buy crude in dollars and sell our refined products in naira. So it is not that we earn dollar proceeds. Our earnings from the sale of diesel, kerosene and black oil is in naira.

“The only dollar component is the sale of naphtha, but most of our refineries won’t sell naphtha, they put it back into the system and reproduce kerosene or diesel. So we still have to visit the Central Bank of Nigeria or domestic dollar market to source our dollars.”

Marketers react

Commenting on the development, oil marketers stated that the continued fall of the naira against the dollar was limiting the release of refined petroleum products from the modular refineries.

Marketers under the aegis of the Natural Oil and Gas Suppliers Association of Nigeria stated that operators of these refineries had stated that the country’s foreign exchange crisis had made it difficult to put a price on refined petroleum products.

They called on the Federal Government and NNPCL to start supplying crude oil to local refineries in naira, considering the persistent fluctuations of the dollar.

The President, NOGASA, Benneth Korie, who conveyed the resolutions of members of the association after their meeting in Abuja, stated that the government should peg the foreign exchange rate at N750/$ in order to enable refineries to start pumping out refined products.

“If for example crude is $80/barrel, we will have to convert it to naira and sell to Nigerians at the naira rate. Let me start by telling you the implications. The problem holding most of these refineries and modular refineries from coming up is the exchange rate crisis.

“So the answer to this is for the government to come out and tell Nigerians that this is how much the dollar is, not this forex rate we hear on TV. Let the government come out and tell us the rate, not the black market rate.

“I know our budget this year was benchmarked at about N750/$. So if the government can maintain the exchange rate at N750/$, heaven will not fall, whether there is inflow or no inflow. It is not the first time we are seeing the dollar at N400 and they (black marketers) are selling for N800.

“So let’s go back and try it, because if we allow this crisis to continue, the dollar may get to what we cannot handle; it may get to the point that all our food items could be sold at dollar rates if care is not taken.

“Therefore, let us go back to N750/$ as it was stated in the budget and work with that, so that the crude oil that will be sold to the refineries will be sold at the exchange rate of N750/$, and it should be converted and we pay in naira.”

Explaining further, he said, “If you are buying crude oil from the government, you pay in dollars, but how do you blend? How much are you going to sell your refined products when you don’t know how much the dollar is going to be tomorrow?

“So it will affect you as a businessman. But if we have one price from the government, then when you are buying the crude from the government or NNPC, you will calculate it based on the government’s rate, convert it to naira and then sell it to Nigerians in naira.

“But when you go to get dollars today and they say it is N1,500, how do you calculate? It creates confusion. So it is causing a problem. Let’s have one rate from the government and things will change positively.”

The NOGASA president went ahead to speak on refineries under the management of NNPCL, as he stated that the forex crisis was also affecting these plants.

“For the Port Harcourt refinery, they said it will come up, and they are also into the business of buying and selling, so if the dollar is not stable, be rest assured it is their problem too,” Korie stated.

When probed further on whether the forex crisis was a major factor limiting the release of products from the refineries, he replied, “For most of them, yes!. This is because you don’t know how much you are going to buy the dollar and so you cannot tell how much you are going to sell (your products). It (dollar) is not stable.”

Speaking further on modular refineries, Korie said operators in this space were finding it tough to source dollars to make crude oil purchase, stressing that the instability of forex had remained a challenge.

On modular refineries, the problem they have is that they do not know how much they will buy and you are selling to them at the dollar rate. If you go to any modular refinery to buy products, the products’ price will be the same at almost the same price as the one you import,” the NOGASA boss stated.

Economy

FG Can’t Account For ₦33.75 Billion Cash Transfers To Vulnerable Nigerians – Auditor-General

Published

9 hours ago

September 6, 2026

Admin

ADVERTISEMENT

The Office of the Auditor-General for the Federation (OAuGF) has raised concerns over ₦33.75 billion transferred to more than 3.29 million households under the Federal Government’s social intervention programme, saying auditors could not obtain sufficient records to verify that the payments reached genuine beneficiaries.

According to Punch, the finding was contained in the Auditor-General for the Federation’s 2024 Annual Report on Non-Compliance/Internal Control Weaknesses in Ministries, Departments and Agencies of the Federal Government.

The audit, which examined transactions carried out by the National Cash Transfer Office in Abuja during the 2023 financial year, raised eight separate queries involving billions of naira and highlighted deficiencies in the agency’s financial controls.

According to the report, ₦33.751 billion was electronically transferred to 3,295,207 households and beneficiaries selected from the National Social Register and enrolled on the National Beneficiary Register across 35 states.

Auditors, however, said the documentation presented for examination was insufficient to establish the identities of those who actually received the money.

The report said payment vouchers accompanying the ₦33.75 billion transactions lacked complete beneficiary information.

More importantly, auditors said they were unable to examine the Remita statement needed to compare recipients of the transfers with names contained in the government’s beneficiary registers.

The report stated, “The paid vouchers for the payments above did not contain the full details of the beneficiaries.

“REMITA statement showing record of the beneficiaries paid as against those listed on the NSR and NBR was not presented for audit. This hindered the authentication of the payments and made it difficult to ascertain whether the beneficiaries who received the funds were genuine.

“All efforts to obtain access to the REMITA statement were obstructed and denied by NTCO accounts staff, thereby frustrating the audit process.”

Consequently, the audit flagged the possibility of payments being made to fictitious or otherwise ineligible beneficiaries, as well as the potential loss of government funds.

The Auditor-General recommended that the National Programme Manager appear before the relevant Public Accounts Committees of the National Assembly to account for the expenditure and produce evidence showing that the intended beneficiaries received the funds.

Where satisfactory evidence cannot be provided, the report recommended recovery of the affected amount and its remittance to the Treasury.

It added that the management of the NTCO did not respond to the audit query.

A separate finding questioned ₦36.744 billion paid through 215 vouchers in December 2023 without undergoing the required prepayment audit.

The transactions, which the report identified as SS, IDA and output-based payments, were processed before being examined by the Internal Audit Unit.

“None of the paid vouchers were pre-audited or checked by the Internal Audit as required by extant regulations,” the report stated.

Instead, internal auditors reviewed the transactions after the payments had already been completed.

The Auditor-General said the procedure exposed public funds to possible misapplication or diversion and recommended that officials account for the ₦36.74 billion before the National Assembly.

Auditors also queried 101 transactions worth ₦4.616 billion after the NTCO failed to provide the corresponding paid vouchers for examination.

The payments were made from the agency’s S&S/IDA Cash Book for various expenditures. Without the vouchers, auditors said they could not adequately scrutinise the spending, prompting another recommendation that the money be accounted for or recovered and returned to the Treasury.

Another issue involved funds released to states for the enrolment of beneficiaries without bank accounts. The report said 32 payments totalling about ₦3.09 billion were made for the exercise.

While documents relating to ₦2.74 billion disbursed to 34 states were presented, auditors said they could not account for the remaining ₦350.18 million.

Even for some of the expenditure presented for inspection, the audit found that the supporting vouchers did not sufficiently explain how the money was spent.

Documents such as beneficiary lists, attendance registers, photographs, enrolment reports and acknowledgements from recipients were also missing.

The Auditor-General recommended recovery of the ₦350.18 million if officials could not satisfactorily account for it.

The report also scrutinised ₦393.71 million reportedly returned by nine State Cash Transfer Units after planned enrolment exercises could not be conducted.

According to the NTCO, insecurity, disasters and other circumstances prevented the affected states from carrying out the exercises, leading to the unused funds being returned to the Treasury in 2023.

Auditors, however, said evidence confirming that the money reached the Consolidated Revenue Fund was not produced.

“No documents were presented by NCTO to confirm that the amount refunded… was credited into the CRF,” the report stated.

It said Remita inflow statements and relevant payment slips that could establish the refund were unavailable. The auditors also found no evidence showing that the affected enrolment exercises were subsequently conducted.

The Auditor-General raised another query over ₦280.42 million paid as mobilisation fees to Payment Service Providers contracted to operate platforms for transferring funds to beneficiaries.

The sum represented a 30 per cent advance payment, but auditors said it was released without an Advance Payment Guarantee.

Questions were also raised about the procurement process used to engage the companies.

According to the report, their files contained no records of pre-qualification, bidding or technical and financial evaluation to demonstrate compliance with procurement requirements.

The audit warned of the risk of paying for unexecuted jobs and recommended recovery of the N280.42m.

Auditors also discovered that goods worth ₦89.51 million purchased by the NTCO were not recorded in its store ledger.

The relevant payment vouchers lacked Store Receipt Vouchers and Store Issue Vouchers needed to track the movement of the items.

More significantly, the audit found that the agency’s store ledger had not been updated since 2020.

The final issue concerned ₦17.42 million spent on diesel through cash advances issued to members of staff.

Auditors faulted the arrangement, saying purchases exceeding the ₦200,000 procurement threshold should have gone through the appropriate contract process.

The report said the items purchased could not be physically sighted or traced to the stores.

It also estimated that the procurement approach denied the Federal Government about ₦2.18 million in Value Added Tax and Withholding Tax.

Across all eight findings, the Auditor-General said the management of the National Cash Transfer Office did not respond to the audit queries.

The report consequently called for explanations, supporting documentation and, where officials fail to satisfactorily account for the affected expenditure, recovery of the funds to the Federal Government’s Treasury.

Economy

Details Of What You Should Know About Dangote Refinery Shares, Price, IPO Date And How To Buy

Published

9 hours ago

September 6, 2026

Admin

ADVERTISEMENT

Dangote Petroleum Refinery is set to enter Nigeria’s public equity market in a landmark ₦2.15 trillion initial public offering (IPO), giving investors direct exposure to the country’s biggest refining investment as it moves to raise fresh capital for expansion.

With the shares priced at ₦525 each and an implied valuation of about $47 billion, the offer ranks among the most closely watched capital-market transactions in Nigeria’s oil and gas industry.

The Securities and Exchange Commission (SEC) approved the IPO on September 4, 2026, paving the way for the offer to open on September 14 and for the refinery to secure a primary listing on the Nigerian Exchange (NGX).

Below are the key facts investors need to know:

Is Dangote Refinery Already Listed On The Stock Exchange?

No, not yet.

As of September 4, 2026, Dangote Petroleum Refinery shares are not yet freely trading on the Nigerian Exchange like shares of Dangote Cement or Dangote Sugar Refinery.

For example, Dangote Sugar Refinery Plc, which trades under the ticker DANGSUGAR, is a completely separate listed company involved in sugar production and refining.

Buying DANGSUGAR shares does not mean an investor owns shares directly in the Dangote Petroleum Refinery. The NGX identifies DANGSUGAR as a consumer-goods company that refines raw sugar into edible sugar.

Investors interested specifically in the petroleum refinery therefore need to wait for the refinery’s own public offering and listing.

When Will Dangote Refinery Shares Be Available?

Aliko Dangote said on September 3 that the refinery’s IPO would open within 10 to 12 days.

Reuters subsequently reported that the order book is expected to open on September 14, 2026, citing people with direct knowledge of the transaction.

This would allow investors to submit applications for shares before the stock eventually begins normal secondary-market trading on the Nigerian Exchange.

However, investors should pay close attention to the final SEC-approved offer documents for the exact opening date, closing date, minimum subscription and allotment arrangements.

How Much Will One Dangote Refinery Share Cost?

Current reports suggest a price of approximately ₦525 per share.

Reuters reported on September 4 that sources involved with the transaction said the refinery was considering a price range of approximately ₦500 to ₦595 per share, with ₦525 emerging as the likely offer price.

About 4.1 billion shares are expected to be offered.

At ₦525 each, the base offer would be worth roughly ₦2.15 trillion, although Reuters put the expected fundraising at around $1.5 billion based on prevailing exchange rates and deal assumptions.

A 15 per cent greenshoe option is also expected. A greenshoe provision means additional shares can be sold if demand is much stronger than initially expected.

Some of these detailed terms were reported by sources familiar with the transaction, while Dangote Refinery had not publicly commented on all of them when Reuters published its report.

Investors should therefore treat the final approved prospectus, rather than social-media flyers or unofficial investment platforms, as authoritative.

How Much Is Dangote Refinery Worth?

This is likely to become one of the biggest questions surrounding the IPO.

A private placement completed ahead of the public offering reportedly valued the refinery at around $40 billion. Reuters noted, however, that some analysts have questioned how that valuation compares with established international refining companies.

Africa Finance Corporation announced in August that it had led strategic investors in a $2.5 billion private placement in Dangote Petroleum Refinery and Petrochemicals.

A high valuation can reflect investors’ expectations about the refinery’s future earnings, strategic importance and expansion plans.

But it can also mean that investors are paying a substantial price today based partly on expected future growth.

The eventual IPO prospectus should provide investors with more detailed financial information with which to assess the company’s valuation.

Can Ordinary Nigerians Buy Dangote Refinery Shares?

The planned offering is specifically expected to include retail investors, meaning individual Nigerians should be able to participate rather than the offer being restricted exclusively to banks, pension funds and other institutional investors.

Dangote had said earlier in 2026 that Nigerians would be allowed to own shares directly in the refinery.

The precise process will become clearer when the approved prospectus is released.

Typically, investors participating in a Nigerian public offer would need appropriate capital-market identification and an account through which the shares can ultimately be held or traded.

Investors should use only channels and receiving agents specifically named in the official offer documentation.

Economy

See Black Market Dollar To Naira Exchange Rate Today 5th September 2026

Published

1 day ago

September 5, 2026

EMMANUEL AGAJI

ADVERTISEMENT

The Black Market Dollar-to-Naira Exchange Rate for 5th September 2026 Can Be Accessed Below.
NOTE: The exchange rate changes hourly. It depends on the volume of dollars available and the Demand. This means…you can buy or sell 1 dollar at a certain rate, and the price can change (high or low) within hours.

The official naira black market exchange rate in Nigeria today, including the Black Market rates, Bureau De Change (BDC), and CBN rates.

The exchange rate fluctuates hourly based on the supply and demand of dollars in the market.

What’s the dollar to naira black market today, 5th September 2026?

The exchange rate for a dollar to naira at Lagos Parallel Market (Black Market) players sell a dollar for ₦1405 and buy at ₦1410 on Saturday, 5th September, 2026, according to sources at Bureau De Change (BDC).
Please note that the Central Bank of Nigeria (CBN) does not recognize the parallel market (black market), as it has directed individuals who want to engage in Forex to approach their respective banks.

Dollar to Naira Black Market Rate Today
Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Selling Rate ₦1405
Buying Rate ₦1410
Dollar to Naira CBN Rate Today
Dollar to Naira (USD to NGN) CBN Rate Today
Highest Rate ₦1321
Lowest Rate ₦1326