BREAKING: President Tinubu Proposes Crude Oil Sales to Dangote Refinery in Naira
Abuja, Nigeria — In a significant move aimed at stabilizing fuel prices and the exchange rate between the dollar and the Naira, President Bola Tinubu has extended a vital lifeline to the Dangote Refinery. The Federal Executive Council (FEC) has approved a proposal put forward by the President to sell crude oil to the Dangote Refinery and other new refineries in Naira.
The Dangote Refinery, which requires 15 shipments of crude oil annually amounting to a total cost of $13.5 billion, will benefit from this initiative. The Nigerian National Petroleum Corporation (NNPC) has pledged to supply four of these cargoes.
The FEC has agreed to allocate 450,000 barrels of crude oil for local consumption, to be sold to Nigerian refineries in Naira. The Dangote Refinery will be the initial beneficiary of this scheme, serving as a test case for the broader initiative. The exchange rate will remain constant throughout these transactions to ensure economic stability.
To facilitate this new trade arrangement, Afreximbank and other Nigerian settlement banks will support the transactions between Dangote and NNPC Limited. This new system will eliminate the need for international letters of credit, streamlining the process and reducing costs. The initiative is expected to yield significant savings for the country by reducing the billions of dollars spent on importing refined fuel.
President Tinubu’s proposal comes at a crucial time, as Nigeria continues to grapple with economic challenges. By selling crude oil in Naira, the government aims to bolster the domestic refining industry, reduce dependency on foreign imports, and ultimately stabilize the national economy.
This decision marks a strategic shift in Nigeria’s approach to managing its natural resources and underscores the administration’s commitment to fostering self-sufficiency in the oil sector. The success of this initiative could pave the way for similar arrangements with other refineries, further enhancing the country’s economic resilience.
