Dangote Refinery Agrees to Sell Crude and Buy Fuel in Naira Amid Potential Losses
In a bold move aimed at supporting Nigeria’s economy, Aliko Dangote, Africa’s richest man and owner of the Dangote Refinery, has agreed to the federal government’s proposal to sell crude oil in naira and buy fuel in the local currency, despite the likelihood of incurring significant financial losses.
The Vice President of Dangote Group, Edwin Devakumar, disclosed this during a recent statement, emphasizing Dangote’s willingness to prioritize the country’s needs over potential profit margins.
“Dangote intervened and said, ‘We are going to accept this because the country desperately needs foreign exchange, and the value of the naira is deteriorating every day,'” Devakumar said, highlighting the billionaire’s concerns over Nigeria’s economic condition.
He further explained that while the exchange rate may worsen by the time the refinery sells products and converts the proceeds into dollars, Dangote is ready to absorb the loss to help stabilize the nation’s economy.
“I understand that I am going to take a loss – because, by the time we sell the product and convert it to dollars, the exchange rate may have worsened. I am willing to take this loss in the interest of the country. I don’t mind; the country is in bad shape. Someone has to take certain risks, and I am ready to face this loss, no matter how significant it may be,” Dangote said, according to Devakumar.
The decision comes at a critical time for Nigeria as the country battles foreign exchange shortages and rising inflation. Dangote’s refinery, located in Lagos, is one of the largest in Africa and is expected to play a crucial role in reducing Nigeria’s dependence on imported refined products, thereby helping to stabilize the naira.
The refinery, with a capacity to refine 650,000 barrels of crude oil per day, is seen as a game-changer for the Nigerian economy, especially in addressing the country’s fuel import challenges. However, selling crude oil in naira instead of the usual dollar transaction is expected to impact the refinery’s financial returns due to fluctuating exchange rates.
Dangote’s willingness to accept potential losses underscores his commitment to Nigeria’s economic recovery and the role the private sector can play in cushioning the effects of economic challenges on the nation.
As Nigeria continues to seek ways to stabilize its currency and attract foreign investments, this move by Dangote represents a significant gesture towards national development at a time when the country faces serious financial pressures.
