The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Tuesday confirmed that it had finalized agreement with the Nigerian National Petroleum Company Limited (NNPCL) to begin the sale of crude oil to Dangote Refinery in local currency – Naira.
The Authority made this disclosure in a statement following the commencement of petrol production by the indigenous refinery company – Dangote Industries Limited – from its 650,000 litres per day plant in Lagos.
It also confirmed that the refinery company had commenced petrol production with the initial target of 25 million litres of petrol this month.
The NMDPRA stated: “At the NMDPRA headquarters in Abuja, NNPCL reach an agreement to commence crude oil sale and supply to Dangote Refinery in local currency.
“The refinery is now posied to supply an initial 25 million litres of PMS into the domestic market this September and will subsequently increase this amount to 30 million litres daily from October 2024”, it added.
In a related statement, President of Dangote Group, Aliko Dangote, said the deal to sell crude oil to the Dangote refinery in Naira would reduce pressure on its foreing exchange demand by at least 40 percent.
The industrialist thanked President Bola Tinubu and his administration fro providing such strategy as part of the efforts to ensure energy security in the country.
He said: “I want to personally also thank Mr. President for creating this idea of Naira for Crude and also Naira for product. This will give a lot of stability for the Naira because you remove 40% of the demand for dollars in the market. That’s not only it.
“Today’s discussion is only to thank God Alimghty for bringing us into this period of now producing gasoline. I know that a lot of people think we won’t be able to deliver. But we’ve been able to deliver”, the industrialist added.
It would be recalled that the Federal Executive Council (FEC) had on July 29 this year at its meeting approved President Tibubu’s proposal to stop NNPCL from selling crude oil to local refineries in foreign currencies.
The FEC decided that the 450,000 barrels for local consumption would be sold in Naira to Nigerian refineries, starting with Dangote Refinery.
According to data on the Dangote Refinery crude oil needs showed that the refinery would require 15 cargos of crude oil yearly, the NNPCL will commit to supply four of the cargoes as part of the government’s efforts to stabilize petrol pump price and the US dollar exchange rate for the Naira, amongst other targets.
