President Tinubu’s proposal to sell crude oil to Dangote Refinery and other forthcoming refineries in Naira has been approved by the Federal Executive Council in a historic step that will stabilize fuel pump prices and the dollar-Naira exchange rate.
At the moment, the Dangote Refinery needs fifteen cargoes of crude every year, or $13.5 billion. Four of these cargoes will be supplied by the Nigerian National Petroleum Corporation (NNPC). Under the new direction from the Federal Executive Council, Nigerian refineries in Naira would purchase the 450,000 barrels of crude designated for domestic use. Dangote Refinery will serve as the initiative’s pilot. For the duration of this transaction, the exchange rate will remain constant.
Afreximbank and other Nigerian settlement banks will facilitate the trade between Dangote Refinery and NNPC Limited. This intervention aims to eliminate the need for international letters of credit and is expected to save the country billions of dollars currently spent on importing refined fuel.
More to follow…
