The Nigerian National Petroleum Company (NNPC) Limited and the Dangote Petroleum Refinery are exploring Direct Sale Direct Purchase (DSDP) agreements for the sale crude oil and purchase of refined petroleum products in naira.
DSDP is an agreement that allows the sale of crude oil to refiners, who will in turn supply NNPC with an equivalent worth of petroleum products. The arrangement has been a successful strategy by NNPC to ensure a sustained supply of petroleum products including; petrol, diesel, and kerosene in the country over the years.
Parties in the deal may conclude discussions next week, the Vice President of Oil and Gas at Dangote Industries Limited, Devakumar Edwin, declared on Thursday during a space session organised by Nairametrics on X.
The Dangote official also revealed that oil marketers had continued to boycott the diesel and aviation fuel produced by the Lekki-based plant, stressing that they had also reported the refinery to President Bola Tinubu that the plant’s low-priced diesel was counter-productive to oil marketers’ businesses.
Edwin further revealed that NNPC had demanded to oversee the production of refined products at the Dangote refinery, based on the fact that the national oil company would supply crude to the plant.
News Diet recalls that in August, the Federal Government disclosed that the sale of crude oil to Dangote refinery and other local refineries would commence on October 1, 2024.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, announced this during a meeting with the Implementation Committee established to implement the decision.
“The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, today led the Implementation Committee meeting on the transition to crude oil sales in naira.
“The meeting reviewed progress on key initiatives, including the upcoming commencement of naira payments for crude oil sales to the Dangote Refinery starting October 1, 2024,” the finance ministry had stated in a post on its official X handle in August.
It also stated that the Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, and the Chairman of the Technical Sub-Committee reported that “The first PMS delivery from Dangote is expected next month (September) under existing agreements.”
Providing updates on this during the space session on Thursday, the Vice President at Dangote Industries, Edwin, noted that discussions were advancing on naira transactions for crude purchase and product buy-back.
“NNPC is going to monitor the production and then buy it back in naira. So, this is where we are and we are waiting for the conclusion of the discussions. Hopefully, by next week, if it gets concluded, we can kick off,” Edwin said.
Edwin disclosed that the President of Dangote Group, Alhaji Aliko Dangote, proposed the naira transactions with the Nigerian government because of the foreign exchange challenges confronting the country.
