President Tinubu Orders NNPC to Supply Dangote with Crude in Local Currency

President Bola Ahmed Tinubu has made a significant move to stabilize Nigeria’s economy by directing the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to the Dangote Refinery in Naira. This directive aims to bolster the local currency and mitigate the volatility in the pump price of refined fuel and the Dollar-Naira exchange rate.

The Special Adviser to the President on Information and Publicity, Bayo Onanuga, shared the news via his official X handle on Monday. He 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.”

Currently, the Dangote Refinery requires 15 cargoes of crude annually, amounting to $13.5 billion. NNPC has committed to supplying four of these cargoes. With the new directive, the Federal Executive Council has approved that the 450,000 barrels intended for domestic consumption be sold in Naira to Nigerian refineries, starting with the Dangote Refinery as a pilot project. The exchange rate for these transactions will be fixed for their duration.

This game-changing intervention is expected to significantly impact the country’s economy positively. By facilitating trade in Naira, the initiative will eliminate the need for international letters of credit, thereby saving Nigeria billions of dollars spent on importing refined fuel. Additionally, Afreximbank and other settlement banks in Nigeria will play a crucial role in facilitating the transactions between Dangote and NNPC Limited.

The decision to use the Dangote Refinery as a pilot for this initiative is strategic. The refinery, touted as the largest single-train refinery in the world, is set to transform Nigeria’s oil industry by significantly reducing the country’s dependency on imported refined petroleum products. This move is anticipated to enhance local refining capacity, create jobs, and stimulate economic growth.

Moreover, by fixing the exchange rate for the duration of these transactions, the government aims to provide a more predictable economic environment for businesses operating in the sector. This predictability is expected to attract more investments into the country’s refining industry, further boosting Nigeria’s economic prospects.

President Tinubu’s directive represents a bold step towards achieving energy independence and economic stability. By leveraging the capacity of the Dangote Refinery and other upcoming refineries, Nigeria aims to harness its crude oil resources more effectively, ensuring that the benefits are felt within the country.

The broader implications of this policy could also lead to a more resilient and self-sufficient energy sector in Nigeria. As the country continues to navigate economic challenges, initiatives like this highlight the government’s commitment to innovative solutions that promote sustainable development and economic growth.

With this directive, Nigeria is poised to transform its oil industry, reduce its reliance on foreign exchange for fuel imports, and strengthen the Naira. This move is a testament to President Tinubu’s proactive approach to addressing the nation’s economic challenges and laying the groundwork for a more robust and self-reliant economy.