In a significant move aimed at stabilizing fuel prices and the dollar-Naira exchange rate, President Bola Tinubu has directed the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to the Dangote Refinery and other upcoming refineries in Naira.
This directive was announced by Bayo Onanuga, the special adviser to the president on information and publicity, via his official X handle on Monday, July 29.
The decision comes amidst ongoing controversies surrounding the quality of locally produced fuel.
On July 18, Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), claimed that local refineries, including the Dangote refinery, produce inferior products compared to imported ones.
In response, billionaire industrialist Aliko Dangote tested diesel from his refinery on July 20 in the presence of federal lawmakers, denying the allegations and calling for a probe into Ahmed’s claims.
Subsequently, on July 22, lawmakers launched investigations into the allegations, including claims that international oil companies (IOCs) in Nigeria are frustrating the survival of the Dangote refinery.
Announcing President Tinubu’s directive, Onanuga stated, “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.”
He added, “Dangote Refinery at the moment requires 15 cargoes of crude, at a cost of $13.5 billion yearly. NNPC has committed to supply four. But 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.”
Onanuga also mentioned that Afreximbank and other settlement banks in Nigeria would 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,” he explained.
This directive represents a strategic effort by the Federal Government to support local refineries, reduce dependency on imported fuel, and stabilize the national economy amidst fluctuating global oil prices and exchange rates.