Tinubu Offers Dangote Refinery Naira-Settled Crude Supply

Oluwasegun SanusiJuly 29, 20241 Mins read743

Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game changing intervention will eliminate the need for international letters of credit. It will also save the country of billions of dollars used in importing refined fuel.

The Federal Executive Council (FEC) has adopted a proposal by Tinubu to sell crude oil to the Dangote Refinery and other refineries in naira.

According to a post on X by Bayo Onanuga, the Senior Special Assistant to the President on Information and Strategy, the intervention would be a game-changer for the country’s fuel importation dynamics and economic stability.

The Dangote Refinery, which currently requires 15 crude oil cargoes annually at $13.5 billion, will pilot this initiative.

The Nigerian National Petroleum Company (NNPC) has already committed to supplying four cargoes, with the FEC approving that the 450,000 barrels intended for domestic consumption be sold to Nigerian refineries in naira.

A source familiar with the matter at the Federal Ministry of Petroleum told West Africa Weekly that 450,000 barrels would be sold to all refineries in Nigeria, including the Port-Harcourt and Kaduna refineries.

He said the decision to sell crude oil in naira to the refineries is to prevent them from re-selling in the open market.

Recall Reuters reported that a top official at the Dangote Refinery said it was allegedly re-selling some United States crude it had purchased to feed the plant.

This new development is reportedly designed to ensure that the exchange rate remains fixed for the duration of this transaction.

This decision comes amid recent tensions between the NNPC, Dangote Refinery, and regulatory bodies.

By settling these transactions in naira, the government aims to eliminate the need for international letters of credit, thus saving billions of dollars spent on importing refined fuel.

”Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game changing intervention will eliminate the need for international letters of credit. It will also save the country of billions of dollars used in importing refined fuel,” he noted.

Afreximbank and other Nigerian settlement banks will facilitate the trade between Dangote and NNPC Limited.

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