Business
Tinubu Approves Crude Oil Sale To Dangote In Naira
President Bola Tinubu has approved the sale of crude oil to Dangote Refinery and other indigenous companies in Naira to promote the trade.
The Chairman, Federal Inland Revenue Service (FIRS), Zacchaeus Adedeji, disclosed this to State House correspondents on Monday after the Federal Executive Council (FEC) meeting at the Presidential Villa in Abuja.
According to Adedeji, effective immediately, the Nigerian National Petroleum Company (NNPC) Limited will engage with local refineries in transactions dominated in Naira.
He said this move was also extended to the sale of crude oil to Dangote Refinery, with the subsequent sale of Dangote’s products to others also to be conducted in Naira.
Adedeji explained that the decision is aimed to mitigate the heavy reliance on foreign exchange for crude oil imports, which currently accounts for roughly 30 to 40 per cent of Nigeria’s forex expenditure.
The FIRS boss further explained that by denominating transactions in Naira, the Federal Government is expected to significantly reduce the forex burden, estimating annual savings of around $7.3 billion.
He emphasised that the shift will stabilise crude oil prices domestically by minimising the impact of forex fluctuations.
According to him, the new policy is anticipated to ease the pressure on Nigeria’s foreign exchange reserves, reducing monthly forex expenditure from $50 million to approximately $600 million.
Towards enhancing the implementation, Afreximbank has been selected as the pilot settlement bank to facilitate the transactions.