The Tinubu-led administration has approved selling of crude oil to Dangote Refinery and other upcoming refineries in Naira. This move aims to stabilize the pump price of refined fuel and the dollar-Naira exchange rate.
Dangote Refinery currently requires 15 cargoes of crude annually, costing $13.5 billion. The Nigerian National Petroleum Corporation (NNPC) has committed to supplying four cargoes. Under the new plan, the 450,000 barrels of crude meant for domestic consumption will be sold in Naira to Nigerian refineries, with Dangote Refinery as the pilot project. The exchange rate for these transactions will be fixed for the duration.
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In a press statement via his X handle, Special Adviser to the President on Information and Strategy, Bayo Onanuga stated, “To ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate, the Federal Executive Council today adopted a proposal by President Tinubu to sell crude to Dangote Refinery and other upcoming refineries in Naira.
“Dangote Refinery at the moment requires 15 cargoes of crude, at a cost of $13.5 billion yearly. NNPC has committed to supply four.
“But the FEC has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as pilot. The exchange rate will be fixed for the duration of this transaction.
“Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game changing intervention will eliminate the need for international letters of credit. It will also save the country of billions of dollars used in importing refined fuel.”