The Nigerian National Petroleum Corporation (NNPC) Limited has requested office space for about 10 of its staff at Dangote Refinery as part of their crude supply agreement.
Devakumar V. G. Edwin, Vice President of Oil & Gas at Dangote Group, explained that NNPC made this request because they will be supplying the crude, overseeing production, and purchasing the products in Naira.
Edwin shared this information during an X (formerly Twitter) Space event organized by Nairametrics titled “Unlocking How Dangote Refinery Shapes Price.”
At the event, he discussed the progress of Premium Motor Spirit, PMS, (petrol) production at the refinery.
Edwin revealed: “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 the production, and buying back the products in Naira.”
Additionally, Edwin highlighted that the negotiations with NNPC involve a new model for crude supply. Under this model, the refinery will purchase crude from the government in Naira and sell Premium Motor Spirit (PMS) in the same currency, instead of using dollars, according to Nairametrics.
Edwin added: “We are still in talks with the government about receiving crude in Naira. The discussions are ongoing, and nothing has been finalised yet.
“Some unresolved issues include the pricing of crude, the pricing mechanism, and determining the appropriate exchange rate for the Naira.”
Edwin explained that Aliko Dangote had accepted the Federal Government’s proposal to sell products from NNPC to the government in Naira, even though this could result in financial losses.
“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,” Edwin quoted Dangote to have said.
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”, as reported by ParallelFacts.
