Market News

by Rachael Omidiji

The federal government reached an agreement to supply 12 million barrels of crude oil to Dangote Refinery in October, as part of the ongoing “Crude Oil for Naira” deal.

Aliko Dangote, the CEO of Dangote Refinery, announced this development during an interview with Bloomberg TV in the United States.

According to him, the arrangement is designed to ensure energy security by enabling the refinery to process crude oil locally and produce petrol, diesel, and jet fuel to meet Nigeria’s domestic demand

Dangote stated, “We are working towards a robust agreement with the Federal Government that guarantees energy security for the country. This means no more fuel queues.”

“The government has committed to providing us with crude oil, and in October, they will deliver 12 million barrels, equivalent to around 390,000 barrels per day. We will refine this crude to produce gasoline, diesel, and aviation fuel for the local market, with any surplus being exported.”

The “Crude Oil for Naira” deal aims to reduce Nigeria’s dependence on imported refined products by utilizing local refining capacity. Dangote emphasized that the initiative would help reactivate 50 to 60 percent of currently non-operational filling stations, significantly improving access to fuel across the country.

“The agreement with the government ensures that we distribute refined products to all marketers, which will lead to the reopening of 50 to 60 percent of petrol stations that have been inactive.

He added that this move will also cut down costs associated with demurrage and the floating of ships off the coasts of Lome and other areas, potentially saving over $1 billion.

This partnership is expected to mark a turning point in Nigeria’s energy sector, ensuring consistent fuel supply and boosting the local economy.