The Nigerian National Petroleum Corporation (NNPC) Limited has requested permanent office space at the Dangote Refinery for a team of around 10 staff members.
Entrepreneurng understands that this request is part of the corporation’s crude supply agreement with the refinery.
According to Devakumar V. G. Edwin, Vice President of Oil & Gas at Dangote Group, NNPC made the request because its team will be responsible for supplying crude oil, overseeing production, and repurchasing the refined products in Naira.
Edwin shared these details during a recent Twitter Space event hosted by Nairametrics, titled “Unlocking How Dangote Refinery Shapes Price.”
During the event, Edwin explained: “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.”
Edwin also highlighted that discussions with NNPC are part of a new crude supply model where the refinery will purchase crude from the government and sell the refined products, specifically Premium Motor Spirit (PMS), in Naira rather than U.S. dollars.
“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.”he added.
Dangote’s Commitment
Edwin further explained that Aliko Dangote, the founder of the Dangote Group, agreed to the Nigerian government’s proposal to sell NNPC’s refined products to the government in Naira, despite potential 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.”
