In a landmark decision, President Bola Tinubu has directed the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to the Dangote Refinery in Naira. This significant policy shift aims to stabilize fuel prices and the exchange rate between the dollar and the Naira.
Key
Highlights:
- Directive
Issued By: President Bola Tinubu
- Company
Involved: Nigerian National Petroleum Company
Limited (NNPCL)
- Recipient:
Dangote Refinery
- Transaction
Currency: Nigerian Naira
- Announcement
By: Bayo Onanuga, Presidential Media Aide
- Platform:
Official X Account (formerly Twitter)
- Date
of Announcement: Monday
Official
Statement
Bayo
Onanuga, a presidential media aide, revealed the directive in a statement on
his official X account. He explained the rationale behind the move:
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.
Details
of the Deal
The
Dangote Refinery, which currently requires 15 cargoes of crude oil annually
worth $13.5 billion, will receive four cargoes from NNPCL. The Federal
Executive Council (FEC) has approved the sale of 450,000 barrels, designated
for domestic consumption, in Naira to Nigerian refineries, with the Dangote
Refinery being used as a pilot project. The exchange rate for this transaction
will be fixed for its duration.
Financial
Facilitation
Afreximbank
and other settlement banks in Nigeria will facilitate the transactions between
Dangote and NNPCL. This innovative approach aims to eliminate the need for
international letters of credit, thereby saving the country billions of dollars
previously spent on importing refined fuel.
Impact on
the Economy
This
policy shift is expected to have several positive outcomes:
- Stabilization
of Fuel Prices: By selling crude oil in Naira,
the government aims to keep fuel prices stable.
- Exchange
Rate Stability: The fixed exchange rate for the
duration of the transaction will help maintain a stable Naira.
- Cost
Savings: The elimination of the need for
international letters of credit will save significant amounts of money.
- Support
for Domestic Refineries: This move supports
the growth and operation of domestic refineries, reducing reliance on
imported refined products.
Context
and Background
The
directive comes amid ongoing disputes between the 650,000 barrel-per-day
Dangote Refinery and various regulatory bodies in Nigeria’s oil and gas sector,
including NNPCL and the Nigerian Midstream and Downstream Petroleum Regulatory
Authority (NMDPRA).
Future
Implications
This
decision marks a game-changing intervention in Nigeria's oil and gas sector. By
facilitating domestic trade in crude oil and supporting local refineries, the
government aims to create a more self-sufficient and economically stable energy
sector.
Stay tuned for more updates on this developing story.
No comments:
Post a Comment