President Bola Tinubu has sanctioned the sale of crude oil to Dangote Refinery and other emerging refineries in Nigerian naira. This decision was announced via a statement on the official X account of the president’s media aide, Bayo Onanuga, on Monday.
According to Onanuga, the president’s directive aims to stabilize the pump price of refined fuel, alleviate pressure on the dollar-naira exchange rate, and reduce the country’s expenditure on importing refined fuel.
The statement outlined that the Federal Executive Council (FEC) approved President Tinubu’s proposal to sell crude oil to Dangote Refinery and other new refineries in naira, to help stabilize both the pump price and the exchange rate. Currently, Dangote Refinery needs 15 cargoes of crude oil annually, costing $13.5 billion, with NNPC committing to supply four of these.
However, the FEC has authorized that 450,000 barrels intended for domestic use be sold in naira to Nigerian refineries, with Dangote’s facility as the initial pilot. The exchange rate for this transaction will be fixed for its duration.
The statement also noted that Afreximbank and other Nigerian settlement banks will facilitate the transaction between Dangote and NNPC Limited, eliminating the need for international letters of credit and saving the country billions of dollars in fuel import costs.
This approval comes in the wake of a dispute between Aliko Dangote, President of the Dangote Group, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over monopoly concerns. The NMDPRA had accused Dangote of attempting to suspend diesel and aviation fuel imports to become Nigeria’s sole supplier.