
Mkpoikana Udoma
Port Harcourt — The Federal Government’s approval for the sale of crude oil to Dangote Refinery and other local refineries in Naira, is effectively silencing Aliko Dangote’s recent allegations against the Nigerian National Petroleum Company Limited, NNPCL, an expert has said.
According to energy expert, Dr. Joseph Obele, this decision is a masterstroke by the government to quieten Dangote’s criticism.
A cabinet member of President Tinubu’s government and Chairman of the Federal Inland Revenue Service, FIRS, Mr Zach Adedeji, yesterday announced that the federal government has approved for NNPC Ltd to immediately begin crude oil sale directly to Dangote refinery and other local refineries in Naira.
The $20 billion Dangote refinery which is the largest in Africa began production at in January 2024 but has struggled to secure enough crude to meet its 650,000-barrel-per-day capacity.
The approval comes after Dangote alleged that some NNPC cabals created a petroleum refinery in Malta from where they import inferior fuel into Nigeria, and had also added as a threat by saying, “we will talk more as we progress.”
Although NNPC Ltd and Oando Plc have denied the allegations of participating or having any dealings with a blending plant in Malta, however, with this new development, it seems the government has taken a clever approach to address the situation, said Joseph Obele.
He said, “Experts in the industry were anticipating that Dangote will say more, because he actually said he was going to say more as the accusations and counter accusations progresses.
“Nigerians will love to know ‘who is the owner of the refinery in Malta and who approved the supply contract to the Malta Refinery?
“The approval made by federal government will definitely make Dangote to talk less or to cease fire because it is a good deal to buy within Nigeria in local currency with a bit of discount as approved.”
The former IPMAN Chairman in Rivers State, also noted that it will be a win-win situation for Nigerians for Dangote and other local refineries to buy crude oil in Naira, as it will reduce the pressure on foreign exchange and promote economic stability.
“Obviously, the benefits to the local refineries is huge and the impact on the Nigeria economy is enormous. Mathematically, a barrel of crude oil is selling now at $84.4. The value in Naira will be N126,000 per barrel at the exchange rate of N1,500 for dollar.
“Fuel will sell for N350 to N400 in Nigeria when Dangote refinery starts buying crude with Naira in Nigeria. As such, several other associated costs that contributed to the high cost for buying abroad will be eliminated, such as cost of international vessel, foreign port charges, foreign exchange rate, commission of intermediary agencies etc. All the associated eliminated cost will eventually trigger a reduction in selling rate of fuel in Nigeria.
“The suffocating Nigeria’s economy will have a relief when such a large volume of crude oil will be sold in local currency. Using local currency will weaken the dollar dominance and pressure on Naira.
“Trading in local currencies holds significant potential in reshaping economic dynamics. It promotes economic stability, reduces dependence on foreign exchange, enhances autonomy, and strengthens regional cooperation.
“Countries conducting trade in their local currencies will always witness a shift towards a more multipolar and inclusive international monetary system. By embracing this approach, nations can foster economic resilience, protect their sovereignty, and unlock new avenues for sustainable development in an interconnected world.”