Following President Bola Tinubu’s directives to the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to local refineries, including the Dangote Refinery in naira, Nigeria is poised to save N$7.32 billion annually.
TimesNow.com.ng earlier reported that Tinubu ordered the NNPC to immediately engage with local refineries, including the Dangote Refinery, to supply crude oil and conduct the transactions in naira.Â
The President made the directive after the Federal Executive Council (FEC) meeting.
Analysts believe the move would reduce Nigeriaâs reliance on foreign exchange for crude imports, which accounts for 30 to 40% of the countryâs FX expenditure.
The plan is also expected to include selling the 650,000 bpd-capacity refinery refined product in naira.
According to reports, Zach Adedeji, the Special Adviser to the President and Chairman of the Federal Inland Revenue Service (FIRS), stated that conducting transactions in naira is expected to ease the governmentâs foreign exchange burden and result in annual savings of about $7.3 billion.
AFREXIM Bank to facilitate transactions
The FIRS boss highlighted that the policy would stabilize the domestic crude oil prices by easing the effects of FX fluctuations.
He said the new plan is designed to reduce the pressure on Nigeriaâs FX reserves by cutting monthly FX spending on petroleum products from $600 million to $50 million.
Reports say the government appointed AFREXIM Bank as the facilitating bank for the transactions.
Adedeji said:
He commended President Tinubuâs approach to addressing Nigeriaâs economic challenges with locally driven solutions.
Adedeji applauded Benedict Oramah, the President of AFREXIM Bank, for facilitating the initiative and collaborating with the Central Bank of Nigeria (CBN), the NNPC, and the Ministry of Finance.
The Dangote refinery has been in a long-drawn feud with the NNPC, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over crude oil supply and product quality from the refinery.
The Dangote Refinery management said the NNPC supplies it with limited crude oil, leading to the facility importing crude from Brazil and the US.
The NMDPRA chief executive officer, Farouk Ahmed, disclosed that the Dangote and other refineries in Nigeria produce inferior petroleum products laced with high sulphur.
Marketers speak on Petrol prices from Dangote Refinery
TimesNow.com.ng previously reported that oil marketers have disclosed that they cannot solely purchase petrol from the Dangote Refinery when it begins to sell the product to Nigerians.
The oil marketers disclosed that they will sell the product at the prevailing pump prices at petrol stations in Nigeria unless the Nigerian National Petroleum Company Limited (NNPC) intervenes.
