As part of their crude supply deal, the Nigerian National Petroleum Corporation, NNPC, Limited has requested for office space for about 10 of its staff at Dangote Refinery.
This was revealed by Devakumar V. G. Edwin, the Vice President, Oil & Gas, of Dangote Group, on an X (Twitter) Space event organised by Nairametrics entitled “Unlocking How Dangote Refinery Shapes Price”.
According to Edwin, NNPC made the demand since they will be supplying the crude, overseeing the production, and buying back the products in Naira.
At the event, he highlighted the progress of Premium Motor Spirit, PMS, (petrol) production at the refinery.
“NNPC has informed us that they intend to station a team of 6 to 10 people permanently at our refinery.
“They’ve asked us to provide office space for them since they will be supplying the crude, overseeing the production, and buying back the products in Naira.” Edwin said.
While noting that the discussions with NNPC are about a new model for crude supply where the refinery will buy crude from the government in Naira and sell PMS in the same currency, rather than in dollars, Edwin added: “We are still in talks with the government about receiving crude in Naira. The discussions are ongoing, and nothing has been finalised yet.
“Some unresolved issues include the pricing of crude, the pricing mechanism, and determining the appropriate exchange rate for the Naira.”
He explained that Aliko Dangote had agreed to the Federal Government’s proposal to sell products from NNPC to the government in Naira, despite the likelihood of financial losses
“Dangote said we are going to accept this because the country desperately needs foreign exchange, and the value of the Naira is deteriorating every day.
“I understand that I am going to take a loss because, by the time we sell the product and convert it to dollars, the exchange rate may have worsened,” Edwin quoted Dangote to have said.
Dangote added: “I am willing to take this loss in the interest of the country. I don’t mind.
“The country is in bad shape. Someone has to take certain risks, and I am ready to face this loss, no matter how significant it may be.”
