Abuja, Nigeria
In a strategic move to stabilize fuel prices and the exchange rate between the dollar and the Naira, President Tinubu has extended an offer of support to the Dangote Refinery. The Federal Executive Council (FEC) has accepted his proposal to sell crude oil to the refinery in Naira, providing a valuable lifeline to the project.
The Dangote Refinery, which requires 15 shipments of crude oil annually at a total cost of $13.5 billion, will now receive four of these cargoes from the Nigerian National Petroleum Corporation (NNPC).
To further support this initiative, the FEC has agreed to allocate 450,000 barrels for local consumption. These will be offered to Nigerian refineries in Naira, with the Dangote Refinery serving as the initial test case. The exchange rate will remain constant throughout these transactions, ensuring price stability.
In addition, Afreximbank and other Nigerian settlement banks will facilitate trade between Dangote and NNPC Limited. By eliminating the need for international letters of credit, this move will streamline the process and result in significant cost savings for Nigeria, reducing the billions of dollars currently spent on importing refined fuel.
President Tinubu’s initiative marks a significant step towards enhancing the economic stability of Nigeria while supporting domestic refining capabilities.
