President Bola Tinubu has mandated the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to the Dangote Petroleum Refinery and other domestic refineries in naira.
This directive, announced on Monday, aims to stabilize the pump price of refined fuel and the exchange rate between the naira and the dollar, according to Bayo Onanuga, the Special Adviser to the President on Information and Publicity.
The Federal Executive Council (FEC) adopted this proposal, which is expected to significantly impact the operations of the Dangote refinery, located in Lekki, Lagos.
Industry analyses suggest that the $20 billion facility will require approximately N1.7 trillion worth of crude oil monthly to meet its operational needs.
With the average price of crude projected at $83 per barrel for 2024, this translates to a daily requirement of about $41.5 million, or N56.55 billion, based on the current exchange rate.
Alhaji Aliko Dangote, the founder of Dangote Industries, has indicated that the refinery is on track to reach a capacity of 500,000 barrels per day (bpd) by August and aims to increase this to 550,000 bpd by December 2024.
This operational ramp-up is critical, as it will allow the refinery to refine substantial quantities of crude oil, thereby contributing to the local fuel supply.
Chief Ukadike Chinedu, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, emphasized the importance of ramping up crude oil production to meet domestic demand. He called on NNPC and relevant ministries to ensure compliance with the directive, highlighting the necessity for collaboration among all parties involved.
Furthermore, the Publicity Secretary of the Crude Oil Refiners Association of Nigeria, Eche Idoko, noted that selling crude in naira could lead to reduced refining costs and potentially lower fuel prices for consumers.
