In a bold move aimed at stabilizing fuel prices and the dollar-Naira exchange rate, President Bola Tinubu has introduced a significant lifeline for the Dangote Refinery. Bayo Onanuga, Special Adviser on Information and Strategy to President Tinubu, announced on his official social media X channel that the Federal Executive Council (FEC) has approved a groundbreaking proposal to sell crude oil to Dangote Refinery and other upcoming refineries in Naira.
According to the announcement, this innovative measure is designed to ensure the stability of both the pump price of refined fuel and the exchange rate. Currently, Dangote Refinery requires 15 cargoes of crude oil annually, costing approximately $13.5 billion. The Nigerian National Petroleum Corporation (NNPC) has already committed to supplying four cargoes.
The FEC’s approval extends this support, with 450,000 barrels of crude oil designated for domestic consumption now to be offered in Naira to Nigerian refineries. Dangote Refinery will serve as the pilot for this initiative, with a fixed exchange rate applied for the duration of the transactions.
To facilitate this trade, Afreximbank and other Nigerian settlement banks will play a pivotal role, eliminating the need for international letters of credit. This strategic intervention is poised to save Nigeria billions of dollars typically spent on importing refined fuel, marking a transformative step in the nation’s economic and energy sectors.
This policy not only reinforces the government’s commitment to bolstering local refineries but also underscores President Tinubu’s proactive approach in addressing critical economic challenges. By reducing dependency on foreign currency for crude oil transactions, this initiative is set to fortify the Naira and promote sustainable economic growth.
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