The Vice President (Oil & Gas), Dangote Industries Limited, (DIL), Mr. Devakumar V.G. Edwin, has said that negotiations are still ongoing over directive by the Federal Executive Council for the Nigerian National Petroleum Company Limited (NNPC Ltd) to sell crude to Dangote Refinery and Petrochemicals in naira.
He explained that critical aspects of the model like the pricing of crude, the pricing mechanism, and determining the appropriate exchange rate for the naira had yet to be finalized.
He stated these during an X Space event organized by Nairametrics titled “Unlocking how Dangote Refinery shapes and price,” according to a report seen by New Telegraph yesterday. Edwin said: “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.”
According to him, the President of Dangote Group, Aliko Dangote, had agreed to Federal Government’s proposal to sell products from the NNPC Ltd to the government in naira, despite the likelihood of financial losses.
He added that Dangote highlighted the critical need for foreign exchange and the deteriorating value of the naira as key factors in his decision to proceed with the deal.
According to him, Dangote showed commitment to national growth by accepting to foot some losses that may come. Edwin said: “Dangote intervened and 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 also said NNPC Ltd requested a permanent presence at the Refinery as part of their ongoing crude supply deal.
He said: “NNPC has informed us that they intend to station a team of six 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.”