The Federal Government has decided against reintroducing fuel subsidies and has instead directed the Nigerian National Petroleum Company Limited (NNPCL) to sell four out of 15 crude oil shipments to Dangote Refinery and other local refineries in Naira.
According to reports, the Federal Executive Council (FEC) approved the sale of crude oil to Dangote Refinery and other local refineries in Naira rather than Dollars. This decision, aimed at stabilizing fuel prices and the Naira-to-Dollar exchange rate, was made during a meeting chaired by President Bola Tinubu on Monday.
Tinubu proposed that NNPC Ltd. sell crude oil to Dangote Refinery in Naira to provide support and ensure stable fuel prices. The Federal Executive Council accepted this proposal as a strategic move to support the local economy and maintain currency stability.
The Dangote Refinery, requiring 15 shipments of crude oil annually at a cost of $13.5 billion, will receive four of these shipments from NNPC Ltd., billed in Naira. This initiative also includes providing 450,000 barrels for local consumption to Nigerian refineries, with the Dangote Refinery serving as the initial test case.
Throughout these transactions, the exchange rate will remain constant to ensure price stability. It’s important to note that this arrangement applies exclusively to the Nigerian National Petroleum Company (NNPC) and does not cover International Oil Companies (IOCs).
This policy shift reflects the Nigerian government’s effort to support local industries and strengthen the domestic economy by leveraging local currency for critical transactions.
