President Bola Ahmed Tinubu has directed the Nigerian National Petroleum Company Limited to sell crude to Dangote Refinery and other upcoming refineries in Naira.
Federal Inland Revenue Service
(FIRS) boss Zack Adedeji disclosed after a FEC meeting chaired by President Bola
Tinubu in Abuja on Monday.
He said the measure would
reduce the strain on the country’s foreign spending and stabilise the pump
price of petrol, diesel, and other products in Nigeria.
Adedeji said FEC ordered that
the state-owned NNPCL immediately begin the full implementation of the
directive to boost local production of refined petroleum products in Nigeria.
The revenue boss also said the
Tinubu administration ordered that the sale of refined products from Dangote
Refinery to oil marketers and distributors be denominated in naira and not in
US dollars.
Dangote Refinery, at the
moment, requires 15 cargoes of crude, at a cost of $13.5 billion yearly. NNPC
has committed to supply four.
However, the FEC has approved
that the 450,000 barrels meant for domestic consumption be offered in Naira to
Nigerian refineries, using the Dangote refinery as a pilot.
The statement added, “The
exchange rate will be fixed for the duration of this transaction.
“Afreximbank and other
settlement banks in Nigeria will facilitate the trade between Dangote and NNPC
Limited. The game-changing intervention will eliminate the need for
international letters of credit, further saving the country of dollar
payments.”
Foremost industrialist and
owner of Dangote Refinery, Aliko Dangote, had accused the authorities and
International Oil Companies of frustrating crude supply to his $20bn facility
sited at the Lekki Free Trade Zone near Lagos.
Regulatory authorities would
later questioned the quality of petroleum products produced at the Dangote
Refinery but the billionaire businessman insisted that the quality of products
at his refinery surpassed the ones imported by marketers.
Dangote commenced operations at
his behemoth facility located in Lagos last December with 350,000 barrels a
day. The refinery hopes to achieve its full capacity of 650,000 barrels per day
by the end of the year.
The refinery has begun the
supply of diesel and aviation fuel to marketers in the country while petrol
supply is expected to commence in August amid regulatory resistance.
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