President Tinubu Directs NNPC to Sell Crude Oil in Naira to Dangote Refinery

In a significant policy shift aimed at stabilizing fuel prices and the exchange rate, President Bola Tinubu has instructed the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to Dangote Refinery in Naira. This directive, disclosed by presidential media aide Bayo Onanuga on X (formerly Twitter), marks a major change in Nigeria’s oil sector.

According to Onanuga's statement, the Federal Executive Council has endorsed President Tinubu’s proposal to sell crude oil to Nigerian refineries, starting with Dangote Refinery, in Naira rather than dollars. This move is intended to help stabilize both the price of refined fuel and the dollar-Naira exchange rate.

Currently, Dangote Refinery requires 15 cargoes of crude oil annually, totaling $13.5 billion. NNPC has committed to supplying four of these cargoes. The new arrangement will see 450,000 barrels allocated for domestic consumption sold in Naira, with the exchange rate fixed for the transaction. This approach is set to eliminate the need for international letters of credit and potentially save billions in fuel import costs.

The directive comes amidst ongoing disputes between Dangote Refinery, NNPC, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and other sector regulators. The new policy aims to address these conflicts and streamline operations within Nigeria's oil industry.