The Federal Government has instructed the Nigerian National Petroleum Company (NNPC) to sell crude oil to the Dangote Refinery exclusively in naira, in a bid to boost the local currency and promote domestic economic activities.
Bayo Onanuga, the special adviser to the President Bola Tinubu on information and publicity, said on Tuesday that the Federal Executive Council adopted a proposal to sell crude to Dangote Refinery and other upcoming refineries in naira.
“Dangote Refinery at the moment requires 15 cargoes of crude, at a cost of $13.5 billion yearly. NNPC has committed to supply four,” Onanuga said on his X account.
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He added, “ The FEC has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as a pilot. The exchange rate will be fixed for the duration of this transaction”.
“Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game-changing intervention will eliminate the need for international letters of credit. It will also save the country billions of dollars used in importing refined fuel”.
Zacch Adedeji, the chairman of Federal Inland Revenue Service (FIRS) also confirmed the move while briefing State House Journalists, after a meeting of the Federal Executive Council FEC meeting presided over by President Bola Tinubu
Adedeji, disclosed that the arrangements was facilitated by AFREXIM bank to promote trade of crude oil in local currency.
“With effect from today, the Nigeria National Petroleum Company Limited (NNPC) will sell crude oil to local refineries and engage with the refineries on the basis of local currency,” Adedeji said.
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“The sale of crude oil to Dangote refinery will be done in naira to reduce pressure on the local refineries.”
He noted that about $660m or N7.92b is spent to procure crude which places pressures on the nation’s foreign exchange, which the new measures will aim to reduce by about 90%.
Giving details on the economic benefits, Adedeji said the new policy will make the economic predictability a reality.
Other benefits include, reduction in foreign exchange pressures by about 94% and saving of finance cost of about $79m
“Council approve that AFREXIM bank will be the settlement bank, while the government will definitely be in charge of the mainstay of our economy,” he said.
