President Tinubu has directed NNPCL to sell crude oil to Dangote Refinery in Naira, a move aimed at stabilizing fuel prices and the exchange rate. This policy shift is expected to save Nigeria billions in fuel import costs.
In a bold move aimed at stabilizing Nigeria’s fuel prices and dollar-Naira exchange rate, President Bola Tinubu has instructed the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to Dangote Refinery in Naira. This directive marks a significant shift in the country’s oil trade policy.
Bayo Onanuga, a presidential media aide, revealed this directive on his official X account on Monday. The decision was endorsed by the Federal Executive Council (FEC) and is expected to have far-reaching implications for Nigeria’s economy.
“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.
Currently, Dangote Refinery requires 15 cargoes of crude oil annually, amounting to $13.5 billion. The NNPCL has committed to supplying four cargoes, and the FEC has approved that the 450,000 barrels intended for domestic consumption be offered in Naira to Nigerian refineries, starting with the Dangote Refinery as a pilot project. This move includes a fixed exchange rate for the duration of the transaction.
Settlement banks, including Afreximbank, will facilitate the trade between Dangote and NNPCL, eliminating the need for international letters of credit and potentially saving the country billions of dollars spent on importing refined fuel.
This policy shift comes amid ongoing disputes between the 650,000 barrel-per-day Dangote Refinery and various Nigerian oil and gas sector regulators, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The government’s decision aims to address these disputes while reinforcing economic stability.
The directive is seen as a game-changing intervention that could reshape the Nigerian oil industry by fostering a more self-reliant economy and reducing dependency on foreign currency for critical transactions.
As Nigeria moves forward with this policy, stakeholders and analysts will be closely monitoring its impact on the economy, particularly in terms of fuel price stability and exchange rate management. President Tinubu’s directive reflects a strategic effort to harness domestic resources for national economic stability and growth.
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