President Bola Tinubu has issued an executive order directing the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to Dangote Refinery and other emerging indigenous refineries in the local currency, Naira.
The announcement was made by Bayo Onanuga, the Special Adviser to the President on Information and Publicity, via a post on X. Onanuga explained that this directive is part of a broader strategy approved by the Federal Executive Council (FEC) to ensure the stability of both the pump price of refined fuel and the exchange rate between the dollar and the Naira.
“To ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate, the Federal Executive Council today adopted a proposal by President Tinubu to sell crude to Dangote Refinery and other upcoming refineries in Naira,” Onanuga stated.
He further elaborated that the Dangote Refinery currently requires 15 cargoes of crude annually, amounting to a cost of $13.5 billion. While NNPC has committed to supplying four cargoes, the FEC has approved that the 450,000 barrels intended for domestic consumption be sold in Naira to Nigerian refineries, using the Dangote Refinery as a pilot project. The exchange rate will be fixed for the duration of this transaction.
The trade between Dangote Refinery and NNPC Limited will be facilitated by Afreximbank and other settlement banks in Nigeria, eliminating the need for international letters of credit and saving the country billions of dollars spent on importing refined fuel.
This game-changing intervention is expected to have a profound impact on the country’s economy, providing a more stable and predictable environment for both fuel prices and exchange rates.
