Marketers Speak as NNPC Sells Crude Oil to Dangote Refinery in Naira
- The Nigerian National Petroleum Company Limited (NNPC) has reportedly supplied about four cargoes of crude oil to the Dangote Refinery
- The move is the arrangement between the Nigerian government and local refineries to supply the product in naira
- The naira-for-crude agreement will last six months and is subject to review by the Nigerian government
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Dangote refinery has received four crude oil cargoes from the Nigerian National Petroleum Company Limited (NNPC) under the naira-for-crude deal.
The cargoes were reportedly delivered to the facility in the last three weeks when the Nigerian government began selling crude to local refineries in naira.
Source: UGC
Crude oil supply deal will last for 6 months
Punch quoted sources as revealing that the refinery was still expecting more cargo from the state oil company.
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They also disclosed that the mega refinery was ready to sell petrol directly to domestic marketers.
An official of the refinery reportedly said that the initiative began with the Dangote Refinery, the only facility producing petrol.
The naira-for-crude agreement will last six months and is subject to review by the Nigerian government. The cost of the last consignment is yet unknown.
Dangote accuses IOCs of sabotage
The $20 billion gigantic refinery encountered crude oil supply hiccups at the inception of its production, leading the President of the Dangote Group, Aliko Dangote, to accuse international oil companies (IOCs) of sabotage.
The Nigerian billionaire alleged that the IOCs insisted on selling crude oil to the facility via their foreign agents and above the international market price.
The refinery’s management said crude oil prices would continue to rise because the IOCs offered to sell at $2 to $4 per barrel above the official price.
Read also
Oil marketers promise to crash petrol prices as negotiations with Dangote refinery continue
It also alleged that the IOCs prioritised selling to Asian markets over Nigeria.
To end the controversies, President Bola Tinubu proposed the sale of crude oil to local refineries in naira on July 19, 2024.
The Nigerian Federal Executive Council (FEC) approved the allocation of 450,000 barrels of crude daily for sale in naira, with Dangote Refinery as a pilot.
NNPC to supply 11.5 million barrels to Dangote
Experts have said that petrol prices will crash drastically if the government sells crude to local refineries and sets the exchange rate at N1,000 per dollar rather than N1,600.
A previous report by Legit.ng revealed that on September 13, 2024, the committee on selling crude oil in naira announced that the FEC approved the initiative to sell crude in naira.
It disclosed that the arrangement would commence on October 1, 2024, with the NNPC supplying 385,000 barrels daily to the Dangote Refinery to be paid in the local currency.
The move shows that the national oil company will supply about 11.5 million barrels of crude oil to the Lekki-based refinery, with the plant releasing the equivalent volumes of diesel and petrol to the local market in naira.
Marketers express optimism about petrol prices
Punch wrote that Chinedu Ukadike, the national publicity secretary of the Independent Petroleum Markers Association of Nigeria (IPMAN), said supplying crude to the Dangote Refinery would address complaints of a shortfall in petrol supply to the NNPC and other oil marketers.
Energy policy analyst Adeola Yusuf disclosed that while the development may not lead to an immediate reduction in the prices of petroleum products, it will eliminate the need to source for FX before buying crude oil.
He said the development will also ease the pressure on the naira and boost the foreign exchange reserve.
“It is a good move. However, we should not yet hope for a crash in petroleum product prices, especially petrol.
“What is good about the initiative is that Dangote and other local refineries can now access crude oil with relative ease without having to purchase FX to buy them,” he said.
Tinubu asks Nigerians to go for CNG
Legit.ng earlier reported that President Bola Tinubu says Nigerian drivers and vehicle owners now have a choice to either pay N1,000 per litre for regular petrol or use a cheaper alternative, compressed natural gas (CNG), which sells at N200 per Standard Cubic Metre.
The president disclosed this during a meeting with executives from the Nigerian Independent Petroleum Company (NIPCO), including its director, Ramesh Kasangra, on Tuesday, October 22, 2024.
Bayo Onanuga, special adviser to the president on information and strategy, disclosed in a statement.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
