The Dangote Petroleum Refinery has officially received its first supplies of crude oil sold in naira, a groundbreaking initiative that commenced on October 1, 2024. This strategic move, facilitated by the Nigerian National Petroleum Company Limited (NNPCL), is set to reshape the landscape of Nigeria's oil market and bolster the nation's economy.
Under this new arrangement, NNPCL will supply approximately 385,000 barrels of crude oil daily to the Dangote Refinery, with all transactions conducted in Nigeria's local currency, the naira. This shift from the traditional dollar-based transactions aims to enhance economic stability and reduce dependency on foreign currency for domestic oil sales.
Finance Minister Wale Edun emphasized that this initiative is a significant step towards stabilizing Nigeria's economy and fostering growth. "The sale of crude oil in naira will not only alleviate pressure on our foreign exchange reserves but also promote self-sufficiency in our energy sector," he stated. In return for the crude oil supplies, the Dangote Refinery will provide an equivalent value of petrol and diesel to the domestic market, also priced in naira.
This policy was approved by President Bola Ahmed Tinubu as part of a broader strategy to strengthen the naira and enhance local refining capabilities. Economic experts predict that this move could lead to substantial savings—estimated at around $7.3 billion annually—by minimizing foreign exchange expenditures associated with petroleum imports.
The initiative also aims to improve the availability of refined petroleum products across Nigeria, potentially leading to lower prices for consumers. Stakeholders in the oil sector have expressed optimism about the positive impacts of this policy on local refineries and the overall economy.
In addition to crude oil sales, all associated regulatory costs for maritime and port operations will now also be settled in naira. This comprehensive approach is expected to streamline operations and further integrate local currency into the oil market.