The Nigerian government expects to save $7.32 billion annually following President Bola Tinubu’s directive for the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to local refineries in Naira. Zacch Adedeji, Special Adviser on Revenue, announced the initiative on Monday, noting that immediate engagements with local refineries, including the Dangote Refinery, will commence.
The decision, made during a Federal Executive Council (FEC) meeting chaired by President Tinubu, aims to reduce Nigeria’s dependency on foreign exchange for crude oil imports, which currently account for 30 to 40 percent of the country’s forex expenditure. This policy will also cover the sale of Dangote’s refined products in Naira.
Adedeji, who also chairs the Federal Inland Revenue Service (FIRS), stated that conducting these transactions in Naira is projected to alleviate the government’s forex burden, stabilizing domestic crude oil prices by reducing the impact of forex fluctuations. The new strategy is expected to cut monthly forex spending on petroleum products from $660 million to $50 million, with AFREXIM Bank appointed as the pilot settlement bank.
He highlighted that this policy will significantly reduce finance costs associated with opening letters of credit and praised President Tinubu’s innovative approach to solving Nigeria’s economic challenges. Adedeji noted that Nigeria currently spends about $7.92 billion annually on PMS imports, and this policy will slash these costs by 90%, saving the nation approximately $7.32 billion annually.
“This will also make economic predictability a reality because we will no longer rely on the fluctuations that happen in FOREX,” Adedeji explained. He commended the collaboration between AFREXIM Bank, the Central Bank of Nigeria, the NNPC, and the Federal Ministry of Finance for facilitating this significant initiative.
News Editor