The Federal Government has pledged to provide foreign exchange support to the Dangote Petroleum Refinery to enable the facility to pay crude oil suppliers amid growing pressure from foreign exchange shortages.
A source familiar with the matter disclosed that the government agreed on Friday to make dollars available to the refinery as the naira-for-crude arrangement continues to face challenges.
The source, who requested anonymity due to the sensitivity of the issue, said the new arrangement would involve the government providing dollars to Dangote Refinery in exchange for petrol the company sells locally in naira.
The intervention is aimed at addressing the refinery’s difficulty in sourcing foreign currency after purchasing crude oil in dollars while supplying refined products to the Nigerian market in naira.
Under the naira-for-crude deal, the Dangote refinery was expected to receive about 13 million barrels of crude oil monthly from the Nigerian market.
The refinery would process the crude and sell petrol and other refined products domestically in naira as part of efforts to reduce pressure on Nigeria’s foreign exchange market and improve local fuel supply.
However, the refinery has reportedly received less than 35 per cent of its expected crude allocation monthly, forcing it to source crude imports from countries including Ghana, the United States and Angola.
The shortfall has increased the refinery’s dependence on dollar-denominated crude purchases, despite its continued sale of refined products in naira.
The development has reportedly created significant foreign exchange pressure for the refinery, with the company facing funding challenges linked to its crude procurement costs.
The Federal Government’s planned intervention is expected to provide relief and support the continued operation of the refinery, which is regarded as a major part of Nigeria’s strategy to achieve energy security and reduce dependence on imported petroleum products.
