Nigerian President Bola Tinubu has authorized the sale of crude oil to the Dangote Refinery and other local refineries in the national currency, the naira.
According to Mr. Bayo Onanuga, the Special Adviser to the Nigerian President on Information and Publicity, who announced this via his official social media handle on Monday, the Federal Executive Council has endorsed this initiative to stabilize the price of refined fuel at the pump and the exchange rate of the naira against the dollar.
Onanuga explained that the Federal Executive Council has approved the allocation of 450,000 barrels intended for domestic consumption to Nigerian refineries, starting with the Dangote Refinery as a pilot project. He noted that this decision aims to support local refining capacity and reduce dependence on imported refined products.
“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. Additionally, the FEC has sanctioned the sale of 450,000 barrels for domestic use to Nigerian refineries, with transactions to be conducted in naira. The exchange rate will remain fixed for the duration of these transactions,” Onanuga stated.
He further outlined that the transaction will be facilitated by Afreximbank and other settlement banks in Nigeria, eliminating the need for international letters of credit and potentially saving the country substantial foreign exchange spent on importing refined fuel.
This move is seen as a significant intervention aimed at bolstering Nigeria’s domestic refining capacity and reducing its reliance on foreign imports for petroleum products.
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