The Federal Government is set to supply 12 million barrels of crude oil to Dangote Refinery in October.
This was confirmed by Aliko Dangote, CEO of Dangote Refinery, during an interview with Bloomberg TV on Monday in the U.S.
According to Dangote, the crude supply is part of an agreement with the government, enabling the refinery to process crude oil and produce petrol, diesel, and jet fuel for the Nigerian market.
He further explained that the arrangement falls under the Crude Oil for Naira deal between the Dangote Group and the government.
“The kind of agreement that we are expecting from the federal government is to have a very robust agreement while first of all, we have energy security, where there won’t be queues.
“The federal government will provide for us crude oil. Already, we have agreed that, for example, in October, they are going to give us 12 million barrels which is averagely about 390,000 barrels a day which will refine and sell for both gasoline, diesels and aviation fuels. And if there is any excess, we will export,” Dangote said.
Dangote further stated that the crude oil supply will enable 50 to 60% of non-operational filling stations in Nigeria to resume operations.
He noted that it will also eliminate the need for shipping fuel across various locations, which will significantly reduce costs.
According to Dangote, this initiative will save the country approximately $1 billion in demurrage fees related to ship landing payments across the continent.
“With the government, I think the agreement will be that when we take that crude oil, we will sell to everybody. It means that 50% or 60% of our petrol stations that have not been working or have been out of work, everybody will now be at work. It will reduce the cost of having ships floating all over Lome and other places. For demurrage alone, we will save over $1 billion,” he said.
The Dangote Refinery, which began producing Premium Motor Spirit (PMS) in August, has delivered its first batch of petrol to the Nigerian market.
As the first of its kind in Nigeria after decades of reliance on imported petrol, the refinery is poised to not only meet local demand but also refine fuel for export to neighboring countries.
Initially, the Nigerian National Petroleum Corporation (NNPC) Limited will be the primary purchaser of fuel from the refinery, distributing it to various marketers across the nation.
Aliko Dangote emphasized that the refinery has the capacity to end Nigeria’s dependence on imported fuel in the coming months.