The Federal Government and Dangote Refinery have finalized an agreement to supply 12 million barrels of crude oil to the refinery in October.
This is part of the “Crude Oil for Naira” initiative, a strategic partnership between the Nigerian government and the Dangote Group.
Aliko Dangote, CEO of Dangote Refinery, confirmed the deal during an interview with Bloomberg TV in the U.S.
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He explained that the crude supply arrangement is part of an ongoing agreement aimed at boosting local refining capacity, allowing the facility to process crude oil and produce petrol, diesel, and jet fuel for Nigeria’s domestic market.
“We are working towards a solid agreement with the federal government that ensures energy security for the country. This means no more fuel queues,” Dangote stated. “The government has committed to providing us with crude oil, and in October, they will deliver 12 million barrels, which translates to roughly 390,000 barrels a day. We will refine this crude to produce gasoline, diesel, and aviation fuel for the local market. Any surplus will be exported.”
He stated that the agreement would help reactivate 50 to 60 percent of currently non-operational filling stations, significantly improving access to fuel nationwide.
“The deal with the government ensures that we sell the refined products to all marketers, which will mean the reopening of 50 per cent to 60 per cent of our petrol stations that have been idle. This will also reduce the costs tied to having ships floating off the coasts of Lome and elsewhere. In terms of demurrage alone, we are looking at saving over $1 billion,” Dangote added.
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