The Nigerian National Petroleum Corporation (NNPC) has requested a permanent presence at the Dangote Refinery as part of their ongoing crude supply arrangement.

Devakumar V.G. Edwin, Vice President of Oil & Gas at Dangote Group, revealed this during an X Space event organised by Nairametrics titled “Unlocking how Dangote Refinery shapes and prices.”

“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 said.

This request aligns with NNPC’s goal to closely monitor the refining process, ensuring efficient crude supply and a steady flow of Premium Motor Spirit (PMS) in the country.

Edwin further explained that discussions with NNPC involve a new model where the refinery will purchase crude from the government in Naira and sell PMS in the same currency, rather than in dollars. He noted that negotiations are ongoing, with key issues such as crude pricing and the Naira exchange rate yet to be finalised.

“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,” Edwin stated.

This shift represents a significant change from the refinery’s original business model, which was designed to operate with transactions in dollars.

Edwin also shared that Aliko Dangote agreed to the federal government’s proposal despite the potential for financial losses. “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,’” Edwin said.

Stressing Dangote’s commitment to the national interest, Edwin 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.”