Abuja, Nigeria — Nigeria has been Africa's largest or second-largest oil exporter for years, but relies heavily on imports to meet local energy needs. The government is trying to change that, saying the country's four moribund oil refineries will be revived and put back in operation.
Under the policy, Nigerian oil producers are allowed to export crude only after meeting their supply obligations to local refiners. Public affairs analyst Jaye Gaskiya said it was the right move."In the current situation globally, this is actually going to turn out much more beneficial to both the producers and refiners in the country," Gaskiya said."Essentially this is designed to ease the problem of supply to the local refineries so that they don't become redundant. The second thing is that it is also designed in such a manner to ease the pressure on the naira," which is the currency of Nigeria.
The new measure includes penalties for oil producers who divert crude oil or refiners who fail to meet payment obligations."The regulation says it is on the basis of willing buyer and willing seller, and that's quite tricky," Gaskiya said."A situation where you have the suppliers, for instance, being unwilling, what are you then going to do as the regulator? So those are the things that the regulator needs to be on the lookout for.