The Nigerian National Petroleum Company Limited (NNPC) and Dangote Petroleum Refinery are finalizing discussions on a crude oil sales agreement in naira, alongside a product buy-back arrangement in local currency. This deal involves NNPC supplying crude oil to the Dangote refinery, while refined products will be bought back by NNPC. Devakumar Edwin, Dangote Industries’ Vice President of Oil and Gas, announced that discussions may conclude next week.
The collaboration aims to address Nigeria’s foreign exchange challenges. Aliko Dangote emphasized his willingness to accept losses for the nation’s benefit by conducting transactions in naira. However, the refinery faces challenges with local oil marketers boycotting its diesel, despite Dangote lowering prices. As a result, the refinery has been forced to export its diesel and aviation fuel, with little patronage domestically.
Edwin also revealed that NNPC will station a permanent team at the Dangote refinery to oversee production. Despite the struggles, the refinery remains capable of meeting Nigeria’s petrol demand, with the first local petrol delivery expected soon. However, Edwin noted that marketers continue to import fuel, limiting the refinery’s local sales.
In response to these challenges, Dangote has begun exporting petroleum products and may continue to do so if local demand remains low.
