THE Federal Government and Dangote Refinery have reached an agreement to supply 12 million barrels of crude oil to the refinery in October.
This agreement is part of the “Crude Oil for Naira” initiative, a strategic partnership between Dangote Group and the Nigerian government.
Aliko Dangote, CEO of Dangote Refinery, confirmed the deal during an interview with Bloomberg TV in the U.S.
He explained that the crude supply is part of an ongoing arrangement with the federal government to enable local refining of crude oil, producing petrol, diesel, and jet fuel for the domestic market.
“We are working on a robust agreement with the federal government to ensure energy security for the country, which will end fuel shortages,” Dangote said. “The government is committed to supplying us with crude oil, and in October, they will deliver 12 million barrels, approximately 390,000 barrels per day. We will refine this crude to produce gasoline, diesel, and aviation fuel for local consumption, with any excess being exported.”
He also highlighted that the agreement would help reactivate 50% to 60% of currently inactive filling stations, significantly improving fuel availability nationwide.
“The government deal ensures we distribute refined products to all marketers, which will lead to the reopening of 50% to 60% of idle petrol stations. This will also cut costs associated with having ships idling off the coasts of Lome and elsewhere. In demurrage costs alone, we anticipate saving over $1 billion,” Dangote added.