The Nigerian government has confirmed that the Nigerian National Petroleum Company Limited (NNPC) will begin supplying crude oil in naira to the Dangote Refinery starting Tuesday, October 2024, as part of efforts to reduce the cost of Premium Motor Spirit (petrol).
Dare Adekanmbi, spokesperson for Zacch Adedeji, the Chairman of the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency, and the Chairman of the Federal Inland Revenue Service, confirmed this in a statement on Sunday.
Adekanmbi noted that Adedeji is working tirelessly to ensure the smooth implementation of the agreement for the benefit of Nigerians.
The committee, on September 13, 2024, announced that the Federal Executive Council, led by President Bola Tinubu, approved the sale of crude to local refineries in naira, with corresponding purchases of petroleum products also in naira, starting October 1, 2024.
The committee stated that NNPC would supply approximately 385,000 barrels per day (kbpd) of crude oil to the Dangote Refinery, with payment made in naira.
This translates to roughly 11.5 million barrels of crude monthly. In return, the refinery will supply equivalent volumes of refined diesel and petrol to the domestic market, also to be transacted in naira.
Eche Idoko, Publicity Secretary of the Crude Oil Refinery-Owners Association of Nigeria, expressed that the naira-for-crude deal should extend to other modular refineries, not just Dangote. Despite this, the current discussions are solely with Dangote Refinery.
Petroleum marketers believe that selling crude to refineries in naira will lead to lower petrol prices.
In August 2024, Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria, predicted a price drop once the deal was implemented.
Currently, Nigerians are paying between N950 and N1,100 per liter of fuel.
NNPCL previously purchased petrol from the Dangote Refinery at N898 per liter, but disagreements arose over pricing.
Aliko Dangote recently claimed his refinery’s petrol was cheaper than imported products, though he did not disclose the exact price. Meanwhile, members of the House of Representatives have asked Dangote Refinery to publicly reveal its petrol pricing, but no information has been released yet.
