In a strategic move aimed at stabilizing fuel prices and the exchange rate between the Naira and the Dollar, President Bola Tinubu has instructed the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to Dangote Refinery and other upcoming refineries in Naira.
This directive was announced by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, through his official X handle on Monday 29th July 2024.
The Federal Executive Council (FEC) adopted this measure during its meeting today, marking a significant shift in the country’s oil trading practices.
Onanuga explained that this policy would help stabilize the pump price of refined fuel and maintain a steady exchange rate between the Naira and the Dollar.
Currently, Dangote Refinery requires 15 cargoes of crude oil annually, costing approximately $13.5 billion. The NNPC has committed to supplying four of these cargoes.
However, the FEC has approved that the 450,000 barrels intended for domestic use be sold in Naira to Nigerian refineries, with Dangote Refinery being used as a pilot project for this initiative.
The order also indicated that the exchange rate for this transaction will be fixed for its duration.
Afreximbank and other settlement banks in Nigeria will facilitate the transaction between Dangote and NNPC Limited.
This move is expected to eliminate the need for international letters of credit, thereby reducing the country’s reliance on dollar payments and potentially saving significant amounts in foreign exchange.
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