The Nigerian National Petroleum Company Limited (NNPC) has confirmed that the deal of supply of crude oil to the Dangote Petroleum Refinery in exchange for naira will last for six months, subject to review by the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency. Sources from the committee and the refinery confirmed the agreement, which aims to reduce pressure on the naira and promote local currency transactions.
Despite being an international commodity priced in dollars, the deal will see 385,000 barrels of crude delivered daily to the Dangote refinery in naira equivalence. This is expected to help curb the reliance on foreign currency and reduce transaction costs for local refineries. However, officials emphasized that the agreement is not permanent and will be revisited after the initial six-month phase.
The Federal Government, through a statement from the Ministry of Finance, announced that the sale of crude oil and refined petroleum products in naira began on October 1, 2024, aligning with President Bola Tinubu’s economic strategy. In the first two months of the agreement, Nigeria will supply 24 million barrels of crude to the Dangote refinery, significantly reducing the country’s crude exports and tightening the Atlantic oil market.
The initiative has garnered attention as a bold move toward economic reform, while oil marketers await further clarifications on the status of NNPC as the sole off-taker of petrol produced by the refinery.
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