Tinubu orders NNPC to sell Crude to Dangote in Naira
"President Bola Tinubu has instructed the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to Dangote Refinery and other emerging refineries in Naira, rather than dollars. This directive, endorsed by the Federal Executive Council (FEC), aims to stabilize both the pump price of refined fuel and the dollar-Naira exchange rate.
According to Bayo Onanuga, Special Adviser to the President on Information and Publicity, the decision was made to support local refineries and reduce the country's reliance on foreign exchange. Dangote Refinery, which requires 15 cargoes of crude oil annually, will be the initial beneficiary of this policy, with NNPC committing to supply four of these cargoes.
The FEC has approved the allocation of 450,000 barrels of crude oil for domestic use, to be sold in Naira to Nigerian refineries. This measure is expected to fix the exchange rate for these transactions and will be facilitated by Afreximbank and other settlement banks in Nigeria.
The new arrangement aims to streamline the process by eliminating the need for international letters of credit, thereby reducing the country's dollar payments and potentially enhancing economic stability. This strategic shift is seen as a positive step towards supporting local industries and promoting economic growth."
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