In a move aimed at stabilizing pump prices of refined fuel and the dollar-Naira exchange rate, the Federal Executive Council (FEC) has endorsed a proposal to sell crude oil in Naira to Dangote Refinery and other upcoming refineries.
President Tinubu’s proposal, adopted during Monday’s FEC meeting, seeks to transition crude sales for domestic consumption into Naira, eliminating the reliance on international currencies. Currently, Dangote Refinery alone requires 15 cargoes of crude annually, amounting to $13.5 billion. The Nigerian National Petroleum Company (NNPC) has committed to supplying four cargoes to Dangote Refinery as part of this initiative.
Under the approved plan, 450,000 barrels designated for domestic use will be offered to Nigerian refineries in Naira, with Dangote Refinery serving as the initial pilot. This arrangement will feature a fixed exchange rate throughout the transaction, managed by Afreximbank and other Nigerian settlement banks. Notably, this strategic intervention is expected to obviate the necessity for international letters of credit and potentially save the nation billions of dollars annually spent on importing refined fuel.
The decision marks a significant shift in Nigeria’s oil sector policy, aimed at bolstering economic stability and reducing dependency on foreign exchange fluctuations in the procurement of refined petroleum products.
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