In order to maintain the stability of fuel prices and the exchange rate between the dollar and the Naira, the Federal Executive Council accepted a suggestion put forward by President Tinubu today. The proposal involves selling crude oil to Dangote Refinery and other new refineries in Naira.
The Dangote Refinery currently needs 15 shipments of crude oil annually, amounting to a total cost of $13.5 billion. NNPC has pledged to provide four of these cargoes.
The FEC has agreed to make available 450,000 barrels for local consumption, which will be offered to Nigerian refineries in Naira, with the Dangote refinery being the initial test. The exchange rate will remain constant throughout this transaction.
Afreximbank and other Nigerian settlement banks will support trade between Dangote and NNPC Limited, improving the process by removing the requirement for international letters of credit. It will also result in significant cost savings for the country by reducing the billions of dollars spent on importing refined fuel.
