The Nigerian National Petroleum Corporation (NNPC) Limited has requested office space for approximately 10 of its staff at Dangote Refinery as part of their crude supply agreement.
This was revealed by Devakumar V. G. Edwin, Vice President of Oil & Gas at Dangote Group, during an X (Twitter) Space event hosted by Nairametrics titled “Unlocking How Dangote Refinery Shapes Price.”
Edwin explained that NNPC made this request because they will be supplying the crude, overseeing production, and purchasing the products in Naira.
During the event, Edwin discussed the progress of Premium Motor Spirit (PMS) production at the refinery. He stated: “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 production, and buying back the products in Naira.”
Edwin further noted that discussions with NNPC involve 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.
He added: “We are still in talks with the government about receiving crude in Naira. The discussions are ongoing, and nothing has been finalized yet. Some unresolved issues include the pricing of crude, the pricing mechanism, and determining the appropriate exchange rate for the Naira.”
Edwin also mentioned that Aliko Dangote agreed to the Federal Government’s proposal to sell products from NNPC to the government in Naira, despite potential financial losses. Edwin quoted Dangote: “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.”
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.”
