News
Dangote Refinery: FG To Save $7.32 Billion Annually With Naira-Based Crude Oil Sale
EKO HOT BLOG reports that the Nigerian government aims to save $7.32 billion annually following President Bola Tinubu’s directive that the Nigerian National Petroleum Company Limited (NNPC) sell crude oil to local refineries in Naira.
This announcement, made by Zacch Adedeji, Special Adviser on Revenue, came after the Federal Executive Council (FEC) meeting chaired by President Tinubu.
EDITOR’S PICK
- Exercise Caution, We’re Open To Dialogue – Sanwo-Olu On Protests
- ‘Nobody Is Planning Any Protest’ – PDP Chieftain Tells Tinubu’s Govt
- VP Shettima Warns Against Protest, Cites Risk Of Anarchy
President Tinubu instructed the NNPC to engage immediately with local refineries, including the Dangote Refinery, to conduct transactions in Naira.
This move is designed to reduce Nigeria’s dependency on foreign exchange for crude oil imports, which currently account for about 30 to 40 percent of the country’s forex expenditure. The initiative is also expected to include selling Dangote’s refined products in Naira.
Adedeji, who also chairs the Federal Inland Revenue Service (FIRS), explained that conducting these transactions in Naira is projected to alleviate the government’s forex burden and generate significant annual savings of approximately $7.32 billion.
He emphasized that this policy would help stabilize domestic crude oil prices by lessening the effects of forex fluctuations.
The new strategy is intended to reduce the pressure on Nigeria’s foreign exchange reserves by cutting monthly forex spending on petroleum products from $660 million to $50 million. AFREXIM Bank has been appointed as the pilot settlement bank for facilitating these transactions.
Billion Naira-Based Crude Oil
“Today, at the Federal Executive Council, a memo from Mr. President emphasized promoting crude oil sales to local refineries and transactions with the NNPC in our local currency,” Adedeji stated. He praised President Tinubu’s innovative approach to addressing Nigeria’s economic challenges with locally driven solutions.
Adedeji noted that Nigeria currently spends about 30-40% of its forex on PMS imports, totaling roughly $660 million monthly or $7.92 billion annually. The new policy is anticipated to slash these costs by 90%, lowering the monthly expenditure to $50 million, saving the nation about $7.32 billion annually. He also mentioned that finance costs associated with opening letters of credit, currently amounting to $79 million, will decrease. AFREXIM Bank will serve as the lead arranger between the NNPC and the Dangote Refinery, coordinating this initiative.
He praised the efforts of AFREXIM Bank’s President, Prof. Benedict Oramah, for facilitating this significant initiative, alongside collaboration with the Central Bank of Nigeria, the NNPC, and the Federal Ministry of Finance.
With this approval, transactions will now be conducted in local currency, not only with Dangote Refinery but with all local refineries for domestic consumption, stabilizing the pump price and ensuring economic predictability. This initiative is expected to result in more employment and bolster the Nigerian economy.
FURTHER READING
- Submit Your Names, Addresses To Police – IG Tells Protest Organisers
- Rivers Court Bars PDP From Holding Congresses
- JUST IN: NNPC Recruitment Portal Breaks Down – Details
Adedeji commended the council members, President Tinubu, the NNPC, and Dangote Refinery, as well as AFREXIM Bank for their roles in making this initiative a reality. He highlighted that AFREXIM Bank would lead the advisory work and structuring of this initiative, in collaboration with key national financial and petroleum agencies.
Click here to watch our video of the week:
Advertise or Publish a Story on EkoHot Blog:
Kindly contact us at [email protected]. Breaking stories should be sent to the above email and substantiated with pictorial evidence.
Citizen journalists will receive a token as data incentive.
Call or Whatsapp: 0803 561 7233, 0703 414 5611
