President Bola Tinubu has directed the Nigerian National Petroleum Company (NNPC) Limited to sell crude oil to Dangote Petroleum Refinery and other refineries in Nigeria’s currency – The Naira.
FEC approved the proposal on Monday during a meeting presided over by Tinubu.
“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,” Onanuga said.
In a statement on X, Bayo Onanuga, special adviser on information and strategy to the president, said the African Export-Import Bank (Afreximbank) and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC.
“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.”
Onanuga said the intervention will eliminate the need for an international letter of credit, further saving the country of dollar payments. It will also save the country billions of dollars used in importing refined fuel”.
According to the NNPCL, Nigeria has been experiencing fuel supply glitches running into weeks, particularly in Lagos and Abuja, over supply disruptions in the discharge of operations of some vessels.
Zacch Adedeji, the chairman of Federal Inland Revenue Service (FIRS) also confirmed the move while briefing State House Journalists, after a meeting of the Federal Executive Council FEC meeting presided over by President Bola Tinubu
Adedeji, disclosed that the arrangements was facilitated by AFREXIM bank to promote trade of crude oil in local currency.
“The sale of crude oil to Dangote refinery will be done in naira to reduce pressure on the local refineries.”
He noted that about $660m or N7.92b is spent to procure crude which places pressures on the nation’s foreign exchange, which the new measures will aim to reduce by about 90%.
Giving details on the economic benefits, Adedeji said the new policy will make the economic predictability a reality.
Other benefits include, reduction in foreign exchange pressures by about 94% and saving of finance cost of about $79m
“Council approve that AFREXIM bank will be the settlement bank, while the government will definitely be in charge of the mainstay of our economy,” he said.
Is this a new dawn for the oil sector in Nigeria? the next few months will tell, all things being equal.
