Abuja — The Nigerian government today gave approval for state oil company NNPC Ltd to sell crude directly to the Dangote refinery in naira starting immediately, a cabinet member said.
The $20 billion Dangote refinery, Nigeria’s main oil refinery and billed to be the largest in Africa at full throttle, started production in January but has struggled to secure enough crude to meet its 650,000-barrel-per-day capacity.
The cabinet gave the nod for NNPC Ltd. to start selling crude to Dangote and other local refinery immediately, Zacch Adedeji, who is a member of the cabinet as chairman of the Federal Inland Revenue Service (FIRS), told reporters. The refineries will also be able to sell refined fuels to local marketers in naira, he said.
Dangote previously had to buy oil on the international market but it filed a complaint saying oil majors were blocking its access to locally produced crude oil by selling it above market price or claiming it was unavailable, forcing the refinery to rely on expensive imports.
Earlier this month, Nigeria’s oil regulator struck a deal with producers to allow sales of crude oil to domestic refiners at market prices as it sought to end a supply dispute that had strained relations with the oil majors.
*Felix Onuah, Elisha Bala-Gbogbo, editing: Mark Potter & Susan Fenton – Reuters
