The Federal Government of Nigeria has announced an agreement to supply 12 million barrels of crude oil to the Dangote Refinery in October.
This arrangement is part of the “Crude Oil for Naira” deal, which is a strategic partnership between the Dangote Group and the government.
Aliko Dangote, the chief executive officer of Dangote Refinery, confirmed this agreement during an interview with Bloomberg TV while in the U.S. He explained that this supply will help the refinery process crude locally to produce petrol, diesel, and jet fuel for the Nigerian 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. He added, “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.”
Dangote emphasized that this deal will significantly improve fuel access across Nigeria. “It will help bring 50 to 60 percent of currently non-operational filling stations back into service,” he said. This means that many more stations will be able to provide fuel to consumers.
“The deal with the government ensures that we sell the refined products to all marketers, which will mean the reopening of 50 percent to 60 percent 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.
