2 months ago
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- Aliko Dangote, Chairman of the Dangote Group, has said that the Nigerian government will supply his refinery with 12 million barrels of crude oil
- Dangote said the move comes under the crude oil for naira agreement with the government
- Dangote said the development will revive about 50 to 60% of the nation’s filling stations
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Chairman of the Dangote Group, Aliko Dangote, has said that the Nigerian government is preparing to supply 12 million barrels of crude oil to the Dangote Refinery in October.
The move will mark a significant step in addressing Nigeria’s fuel demands.
Source: Getty Images
Crude oil for naira deal begins
Dangote disclosed this during an interview with Bloomberg Television in the US.
The Nigerian billionaire revealed that the crude oil is part of an ongoing agreement with the government to enable the refinery to process crude locally and refined petroleum products such as petrol, diesel, and jet fuel for the local market.
He said the arrangement falls under the Crude Oil for Naira deal, a partnership between Dangote Group and the Nigerian government.
According to Dangote, the group is working towards a solid agreement with the Nigerian government to ensure energy security for Nigeria.
FG to supply 12 million barrels of crude in October
He said that the government has committed to delivering the refinery with crude oil, adding that in October, the $20 billion facility will receive 12 million barrels, translating to 390,000 barrels daily.
The 67-year-old Kano-born billionaire said the supply will enable the plant to produce for the local market and export the surplus.
According to the businessman, the crude oil supply will immensely impact Nigeria’s fuel distribution network, reviving 50 to 60% of currently inactive filling stations and drastically improving access to fuel across the country.
The plan will also eliminate the need to transport fuel over long distances by ship. He said the move would cut shipping expenses and save Nigeria about $1 billion in demurrage charges.
Dangote calls for an end to subsidies
A previous report by Legit.ng said that Dangote had asked the Nigerian government to end the petrol subsidy entirely.
The Nigerian billionaire said removing the petrol subsidy would help to determine the actual petrol consumption in Nigeria.
Dangote confirms the date oil blocks will produce
Dangote also confirmed the ownership of two oil blocks in the upstream sector, saying that the blocks will begin production next month.
He also stated that fuel production from the Dangote refinery will ease the pressure on the naira.
In a 26-minute interview with Bloomberg on Monday, September 23, 2024, he stated that now is the right time for Nigeria to end petrol subsidies.
According to him, ending petrol imports will lift the pressure on the local currency and determine the actual consumption volume of petrol in Nigeria.
Marketers compare Dangote petrol price with imported fuel
Legit.ng earlier reported that oil marketers revealed that the price at which Dangote Refinery sold its petrol to the Nigerian National Petroleum Company Limited (NNPC) was way cheaper than the cost of the product when imported from abroad.
The NNPC has said that the Dangote Refinery sold the product at N898 per litre, leading to price adjustments nationwide.
However, Dangote Refinery management refuted the state oil company's claims, saying that it sold the product cheaper than NNPC imports from overseas.
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Source: Legit.ng
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