The Nigerian Midstream and Downstream Petroleum Regulatory Authority has reached an agreement with the Nigerian National Petroleum Corporation Limited to conduct transactions with Dangote Refinery using the naira.
This was disclosed by NMDPRA in Abuja on Tuesday, aligning with the recent federal executive council’s approval, according to Nairametrics.
Under the new arrangement, NNPC will sell crude oil to Dangote Refinery and purchase petrol products from the refinery, both transactions to be conducted in naira.
This follows the commencement of petrol production at Dangote Refinery.
NMDPRA also confirmed that Dangote has begun petrol production, adding that the refinery will produce 20 million liters of petrol in September.
“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 poised to supply an initial 25 million litres of PMS into the domestic market this September. And will subsequently increase this amount to 30 million liters daily from October 2024,” NMDPRA said.
In a separate statement, Dangote Refinery CEO, Aliko Dangote praised President Bola Tinubu for the agreement to sell crude oil to the refinery in naira.
Dangote noted that this decision is expected to alleviate foreign exchange pressure by at least 40%.
He expressed his sincere gratitude to President Tinubu and his administration for implementing this strategy, which aims to enhance energy security in the country.
“I want to personally also thank Mr. President for creating this idea of Naira for Crude and also Naira for the product. This will give a lot of stability for the Naira because you remove 40% of the demand of the dollars in the market. That’s not only it.
“Today’s discussion is only to thank God almighty 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,” Dangote said.
Recall, it was earlier reported that the Federal Executive Council had approved President Tinubu’s proposal to halt the sale of crude oil to local refineries in foreign currency.
The Council’s decision stipulated that the 450,000 barrels allocated for domestic use would be sold in naira to Nigerian refineries, with Dangote Refinery selected to pilot this initiative.
