AGS NEWS – President Bola Tinubu’s approval for selling crude oil to the Dangote Petroleum Refinery in naira is expected to lower the prices of locally refined petroleum products, according to oil marketers and experts.

Industry operators praised the decision, saying it would enhance domestic refinery outputs, bolster foreign exchange reserves, and strengthen the naira.

ALSO READ: Sallah: Obasanjo visits Oluremi Tinubu

They also appreciated the media’s role in highlighting this issue, emphasizing the need for Nigerian refineries to avoid reliance on the US dollar for procuring locally produced crude.

On Monday, Tinubu directed the Nigerian National Petroleum Company Limited to sell crude to the Dangote refinery and other refineries in naira.

This was announced by Bayo Onanuga, the President’s Special Adviser on Information and Publicity, on his official X handle.

The Federal Executive Council adopted the proposal to stabilize fuel pump prices and the dollar-naira exchange rate. Dangote refinery, which has faced supply issues with International Oil Companies (IOCs), currently needs about 15 cargoes of crude oil annually, costing around $13.5 billion.

NNPC has committed to supplying four cargoes, with the latest order ensuring crude supply in naira.

The decision will also apply to the 450,000 barrels meant for domestic consumption, using the Dangote refinery as a pilot.

The exchange rate will be fixed for these transactions, with Afreximbank and other banks facilitating the trade.

President’s Special Adviser on Revenue, Zacch Adedeji, noted that this move reduces Nigeria’s dependence on foreign exchange for crude oil imports, potentially saving $7.3 billion annually and reducing monthly forex expenditure from $660 million to $50 million.

Industry leaders, including the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria and the Publicity Secretary of the Crude Oil Refiners Association of Nigeria, commended the initiative, highlighting its potential to lower petrol costs and strengthen the naira.

Professor Dayo Ayoade of the University of Lagos supported the government’s move but questioned if the crude meant for local consumption had not been pre-sold by the previous administration.

ALSO READ: Dangote refinery receives inaugural crude supply

He emphasized the need for the government to address crude oil theft and increase production.

Dangote refinery and other domestic refiners have reported difficulties in accessing crude oil, with Dangote management alleging that IOCs prefer selling to foreign agents at higher prices.

The Vice President of Oil & Gas at Dangote Industries Limited, DVG Edwin, urged the Nigerian Upstream Petroleum Regulatory Commission to address the pricing issue.

This decision is seen as a significant step toward stabilizing Nigeria’s oil sector and economy.