NNPC and Dangote Refinery forge New path in Petroleum Refining

In a strategic bid to boost local petroleum refining and reduce dependence on foreign currency, NNPC Limited and the Dangote Refinery have embarked on negotiations to adopt a new crude supply model.

Under this proposed model, NNPC would oversee the production of petrol while supplying crude to the refinery and purchasing refined products in the Nigerian Naira, a significant departure from the conventional practice of transacting in US Dollars.

During a recent X (formerly Twitter) Space event, Devakumar V.

As part of the new model, NNPC is looking to station a permanent team of 6 to 10 employees at the Dangote Refinery to facilitate effective management of operations related to the crude supply agreement.

The Vice President of Oil & Gas at Dangote Group, Devakumar V. G. Edwin, acknowledged the request during the X Space event, demonstrating the level of commitment and collaboration between the two entities.

The innovative approach to crude supply seeks to address the foreign exchange concerns that have long plagued the Nigerian petroleum industry, potentially paving the way for more sustainable and resilient local refining.

While the new model presents an ambitious vision for Nigeria’s petroleum sector, the discussions around key details such as crude pricing and the Naira exchange rate remain ongoing and subject to further negotiation.

Despite the uncertainties surrounding the implementation of this initiative, Aliko Dangote, Chairman of Dangote Group, has expressed his willingness to accept potential losses in the interest of the country, a testament to his commitment to driving economic growth and stability in Nigeria.

References and Citations:

• Pulse Nigeria – Fresh twist as NNPC demand office space at Dangote Refinery
• Punch – NNPC, Dangote eye crude-sale, product by-back deal
• Legit.ng – Dangote Refinery strikes New on product Buy-Back as NNPC prepares to lift petrol