President Bola Tinubu has directed the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to Dangote Refinery and other upcoming refineries in Naira.
This directive was announced by Bayo Onanuga, the Special Adviser to the President on Information and Strategy, through an official post on his X (formerly Twitter) handle on Monday.
Onanuga explained that this initiative, approved by the Federal Executive Council (FEC) earlier in the day, aims to stabilize both the pump price of refined fuel and the exchange rate between the Naira and the US dollar.
According to PUNCH Online, the Dangote Refinery currently requires 15 cargoes of crude oil annually, at an estimated cost of $13.5 billion. The NNPC has committed to supplying four of these cargoes.
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The FEC has endorsed a plan whereby the 450,000 barrels of crude oil designated for domestic consumption will be sold in Naira to Nigerian refineries, starting with the Dangote Refinery as a pilot project. This arrangement will feature a fixed exchange rate for the duration of the transaction.
Furthermore, the African Export-Import Bank (Afreximbank) and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited.
This innovative approach aims to eliminate the need for international letters of credit, thereby saving the country from substantial dollar payments.
This strategy is expected to significantly reduce the financial burden associated with international currency transactions, providing a more stable and predictable economic environment for the nation’s oil industry.