President Bola Tinubu has ordered sales of crude oil to Dangote and other local refineries in local denomination.
Chairman of the Federal Inland Revenue Service (FIRS) Chairman, Zacchaeus Adedeji, disclosed this to State House correspondents on Monday after the Federal Executive Council, FEC, meeting at the Presidential Villa in Abuja on Monday.
The development followed frustration by the Chief Executive Officer of Dangote Oil Refinery, Aliko Dangote, where he called on the Fedeal Government of Nigeria to buy off his 650bpd refinery since he could not get crude oil locally after spirited effort.
Tinubu’s approval on Monday for the supply of crude oil to Dangote and other refineries locally by the Nigeria National Petroleum Limited, NNPCL is to take immediate effect.
Adedeji said, the move was also extended to the sale of crude oil to Dangote Refinery, with the subsequent sale of Dangote’s products to others also to be conducted in Naira.
He said the decision aimed to mitigate the heavy reliance on foreign exchange for crude oil imports, which currently accounts for roughly 30 to 40 per cent of Nigeria’s forex expenditure.
The FIRS boss further explained that by denominating transactions in Naira, the federal government expected to significantly reduce the forex burden, estimating annual savings of around $7.3 billion.
Adedeji emphasised that the shift will stabilise crude oil prices domestically by minimising the impact of forex fluctuations.
He said the new policy is anticipated to ease the pressure on Nigeria’s foreign exchange reserves, reducing monthly forex expenditure from $50 million to approximately $600 million.
As part of the implementation, Afreximbank has been selected as the pilot settlement bank to facilitate the transactions.
