President Bola Tinubu has proposed the Nigerian National Petroleum Company Limited (NNPCL), sell crude oil to Dangote Petroleum Refinery and other refineries in the local currency, the Naira.
According to the Special Adviser on Information and Strategy to the President, Bayo Onanuga yesterday, the proposal was adopted by the Federal Executive Council, (FEC).
He said, “To ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate, the Federal Executive Council yesterday adopted a proposal by President Tinubu to sell crude to ?angote Refinery and other upcoming refineries in Naira”.
“?angote Refinery at the moment requires 15 cargoes of crude yearly, at a cost of $13.5 billion. 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 pilot. The exchange rate will be fixed for the duration of this transaction”.
Onanuga said the African Export-Import Bank (Afreximbank) and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPCL.
“The game-changing intervention will eliminate the need for international letter of credit, further saving the country of dollar payments”, the spokesperson stated.
The decision followed the dispute between ?angote Refinery, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA), and the Nigerian Upstream Petroleum Regulatory Commission, (NUPRC).
Recall that on June 4, Aliko ?angote, the founder of Dangote Group, said some international oil companies (IOCs) were struggling to supply crude to his refinery.
Recall that Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, while speaking on a television programme on July 15, described the claim as “erroneous” as the Petroleum Industry Act (PIA) has provisions that guide willing buyer-willing seller transactions.
On July 17, the management of ?angote Industries Limited (DIL) insisted that IOCs are frustrating its request to purchase crude feedstock for the refinery.
Also, Chief Executive Officer (CEO) of NMDPRA, Farouk Ahmed, on July 18, said local refineries, including the ?angote Refinery, produce inferior products compared to the ones imported into the country.
However, ?angote denied the allegation, by testing diesel from his refinery on July 20 when federal lawmakers visited the plant. The billionaire also called for a probe into the allegations made by the NMDPRA.
On July 22, the lawmakers launched investigations into Ahmed’s claim.
They said allegations that the IOCs in Nigeria are frustrating the survival of the ?angote Refinery will also be probed. On the same day, Minister of State, Petroleum Resources (oil), Heineken Lokpobiri, held a meeting with ?angote, CEO of NUPRC, Gbenga Komolafe and Group CEO of NNPCL, Mele Kyari, to resolve the dispute. A day after, the House of Representatives asked the Federal Government to suspend Ahmed over “unguarded comments”.
