Dangote And Local Refineries Set To Purchase Nigerian Crude In Naira

Nigeria is set to bolster the Naira by selling crude oil to both Dangote and local refineries, as per an announcement from the Federal Government.

Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, revealed this during a briefing held in Abuja on Monday, April 15.

The country’s crude oil and condensate reserves surged to 37.5 billion barrels as of January 1, 2024, with a life index of 68.01 years, according to Komolafe.

He outlined that the commission collaborated with various stakeholders, including NNPC Upstream Investment Management Services, representatives of Crude Oil/Condensate Producers, the Crude Oil Refinery-Owners Association of Nigeria, and Dangote Petroleum Refinery to devise a comprehensive plan.

The objective is to ensure a smooth implementation of the Direct Crude Oil Sale and Offshore Purchase model (DCSO) and to maintain a steady supply of crude oil to domestic refineries.

Komolafe emphasized that the Petroleum Industry Act (PIA) aims to streamline the execution of crude oil obligations for both producers and refineries.

Regarding the currency for transactions, he clarified that it could be either in Naira or dollars. However, conducting transactions in Naira would alleviate pressure on the exchange rate, ultimately benefiting it. This move aligns with the broader goal of the PIA, which emphasizes the development of the midstream sector.

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