Tinubu Orders NNPC to Sell Crude Oil to Dangote Refinery in Naira

Tinubu Directs NNPC to Sell Crude to Dangote Refinery in Naira.

Abuja, Nigeria – In a significant policy shift, President Bola Tinubu has instructed the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to Dangote Refinery and other emerging refineries in Naira. This directive aims to stabilize the pump price of refined fuel and manage the dollar-Naira exchange rate.

Bayo Onanuga, the President’s special adviser on information and publicity, announced the directive via his official X handle on Monday, July 29. This decision was reportedly adopted during the Federal Executive Council meeting earlier today.

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This development follows recent statements by Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), on July 18, alleging that local refineries, including the Dangote refinery, produce inferior products compared to imports. In response, Dangote refuted these claims by demonstrating the quality of his refinery’s diesel on July 20 during a visit by federal lawmakers.

The billionaire entrepreneur also highlighted issues with international oil companies (IOCs) not supplying crude oil to his refinery, calling for an investigation into these allegations. Subsequently, on July 22, lawmakers initiated probes into Ahmed’s claims and the alleged obstructions by IOCs.

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In his announcement, Onanuga outlined the key points of President Tinubu’s directive: “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.

“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.

“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.”

This initiative is expected to enhance the financial operations of local refineries, reduce dependency on imported Fuel.