By Ademola Tijani
The federal government has approved the sale of crude oil to Dangote Refinery and other emerging refineries in naira, in response to President Bola Tinubu’s proposal to the Federal Executive Council (FEC) to that effect.
Currently, Dangote Refinery requires 15 cargoes of crude oil annually, costing approximately $13.5 billion. The Nigerian National Petroleum Corporation (NNPC) has pledged to supply four of these cargoes.
The FEC’s new directive allows for the sale of 450,000 barrels of crude oil, intended for domestic use, to be transacted in Naira with Nigerian refineries, starting with the Dangote Refinery as a pilot project.
The exchange rate for this transaction will be fixed for its duration.
Afreximbank and other settlement banks in Nigeria will oversee the financial transactions between Dangote and NNPC Limited.
This move is expected to remove the necessity for international letters of credit, potentially saving the country billions of dollars that would otherwise be spent on importing refined fuel.
The initiative aims to enhance economic stability by reducing reliance on foreign exchange and supporting local refining capabilities.
