President Tinubu has extended significant support to the Dangote Refinery by instructing the Nigerian National Petroleum Corporation (NNPC) to sell crude oil to the refinery in Naira, providing a crucial lifeline.
To stabilize fuel prices and the exchange rate between the dollar and the Naira, the Federal Executive Council (FEC) has approved President Tinubu’s proposal. The plan involves selling crude oil to the Dangote Refinery and other emerging refineries in Naira.
The Dangote Refinery requires 15 shipments of crude oil annually, costing a total of $13.5 billion. The NNPC has committed to supplying four of these shipments.
The FEC has agreed to allocate 450,000 barrels for local consumption, which will be sold to Nigerian refineries in Naira, with the Dangote Refinery serving as the initial test case. The exchange rate for this transaction will remain constant.
Afreximbank and other Nigerian settlement banks will facilitate the trade between Dangote and NNPC Limited, enhancing the process by eliminating the need for international letters of credit. This move is expected to result in significant cost savings for the country by reducing the billions of dollars spent on importing refined fuel.
