The Nigerian National Petroleum Corporation (NNPC) has requested a permanent presence at the Dangote Refinery as part of their crude supply deal. This was revealed by Devakumar V.G. Edwin, Vice President (Oil & Gas) of Dangote Group, at an X Space event organized by Nairametrics.
NNPC intends to station a team of 6 to 10 people permanently at the refinery to oversee the supply of crude, production, and purchase of products in Naira. This marks a significant shift from the refinery’s original business model as a free zone company operating with transactions in dollars.
The discussions with NNPC revolve around a new model for crude supply, where the refinery will buy crude from the government in Naira and sell PMS in the same currency. However, critical aspects like crude pricing and the Naira exchange rate have yet to be finalized.
Aliko Dangote has agreed to the federal government’s proposal to sell products from the NNPC to the government in Naira, despite the likelihood of financial losses. Dangote highlighted the critical need for foreign exchange and the deteriorating value of the Naira as key factors in his decision to proceed with the deal.
The NNPC’s request for a permanent presence at the refinery aligns with their aim to closely monitor the entire process, ensuring efficient crude supply and processing while securing a steady flow of PMS for the country. The negotiations are ongoing, with unresolved issues including crude pricing, pricing mechanisms, and determining the appropriate exchange rate for the Naira.
