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The Nigerian National Petroleum Corporation (NNPC) Limited has requested dedicated office space for around 10 of its employees at the Dangote Refinery as part of an agreement involving the supply of crude oil.
During a X Space event hosted by Nairametrics titled “Unlocking How Dangote Refinery Shapes Price,” Vice President of Oil & Gas at Dangote Group, Devakumar V.G. Edwin, disclosed this development.
He explained that NNPC made the request since it would be responsible for supplying the crude oil, monitoring the production process, and repurchasing the refined products in Naira.
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.”
This arrangement involves the refinery purchasing crude from the government in Naira and selling Premium Motor Spirit (PMS) in the same currency rather than in dollars.
Edwin emphasized that negotiations with the government are ongoing, particularly regarding the pricing structure for crude oil, the pricing mechanism, and the exchange rate to be used for the Naira.
He noted that no final agreement had been reached yet, with several details still being discussed.
Speaking on behalf of Dangote, Edwin mentioned that Aliko Dangote had agreed to a proposal from the Federal Government to sell NNPC’s products back to the government in Naira, even though this might result in financial losses.
According to Edwin, Dangote recognized the potential losses due to fluctuations in the exchange rate but expressed his willingness to bear the cost for the benefit of the country.
“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.
“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,” Edwin quoted Dangote to have said.
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