In a move aimed at stabilizing fuel prices and the exchange rate, President Tinubu has proposed that the Nigerian National Petroleum Company (NNPC) sell crude oil to the Dangote Refinery and other new refineries in Naira. The Federal Executive Council (FEC) has accepted the proposal, which is expected to provide a significant lifeline to the refinery.
Under the agreement, NNPC will supply 450,000 barrels of crude oil per day to Nigerian refineries, including the Dangote Refinery, at a fixed exchange rate. This will eliminate the need for international letters of credit and result in substantial cost savings for the country by reducing the reliance on imported refined fuel.
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The Dangote Refinery, which requires 15 shipments of crude oil annually, valued at $13.5 billion, will be the initial beneficiary of this arrangement. NNPC has committed to providing four of these shipments.
Afreximbank and other Nigerian settlement banks will facilitate the trade between Dangote and NNPC Limited, streamlining the process and reducing costs. This move is expected to have a positive impact on the country’s economy by reducing the pressure on foreign exchange reserves and stabilizing fuel prices.
