Just in: Tinubu orders NNPCL to sell crude to Dangote in naira – Newstrends
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Just in: Tinubu orders NNPCL to sell crude to Dangote in naira

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8 months ago

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Just in: Tinubu orders NNPCL to sell crude to Dangote in naira

 

President Bola Tinubu directed the Nigerian National Petroleum Company Limited to sell crude oil to Dangote Refinery in naira.

This is expected to put to rest the messy face-off between the Dangote Refinery and government regulatory agencies in the oil sector over the supply of crude and quality of products coming from the new refinery.

The presidential order was disclosed on Monday by the Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, on his X handle.

Onanuga said the decision was taken at the Federal Executive Council meeting to ensure the stability of the pump price of refined fuel.

He wrote: “To ensure the stability of the pump price of refined fuel and the dollar-Naira exchange rate, the Federal Executive Council today adopted a proposal by President Tinubu to sell crude to Dangote Refinery and other upcoming refineries in Naira.

“Dangote Refinery at the moment requires 15 cargoes of crude, at a cost of $13.5 billion yearly. NNPC has committed to supply four.

“But the FEC has approved that the 450,000 barrels meant for domestic consumption be offered in Naira to Nigerian refineries, using the Dangote refinery as pilot. The exchange rate will be fixed for the duration of this transaction.

“Afreximbank and other settlement banks in Nigeria will facilitate the trade between Dangote and NNPC Limited. The game changing intervention will eliminate the need for international letters of credit. It will also save the country of billions of dollars used in importing refined fuel.”

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How to use $23bn forex reserves to stablise exchange rate, by Uwaleke

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7 hours ago

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April 7, 2025

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How to use $23bn forex reserves to stablise exchange rate, by Uwaleke

A financial expert, Prof. Uche Uwaleke has said the accretion of Foreign Exchange Reserves (NRER) at 23.11 billion dollars to Nigeria’s external reserves puts the Central Bank of Nigeria (CBN) in a stronger position to defend the value of the naira.

“The CBN can leverage rising external reserves to intervene in the forex market whenever it becomes necessary to stabilise the exchange rate,” Uwaleke said while arguing that the current size of the NER will positively impact on the value of the Naira.

Uwaleke, a Professor of Capital Market at the Nasarawa State University, Keffi, is also the President of the Capital Market Academics of Nigeria, however, raised concerns that the increase in the nation’s foreign reserves had been largely on account of temporary FX inflows such as Foreign Portfolio Investments (FPIs) and foreign loans.

He said that they represented unsustainable sources of growing external reserves.

“Impatient capital such as FPIs carry a lot of risks and have the potential of destabilising the economy whenever they leave the country.

“Against this backdrop, the government should pay more attention to diversifying the export base of the economy, especially via agriculture and solid minerals.

“The government should also create the enabling environment that attracts sustainable Foreign Direct Investments (FDIs) ,” he said.

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The CBN recently revealed that the NFER stood at 23.11 billion dollars at the end of 2024, their highest level in three years.

The apex bank said that the development signalled a major improvement in the country’s external financial position.

It said that the NFER, which adjusts gross reserves to account for near-term liabilities such as currency swaps and forward contracts, stood at 3.99 billion dollars at the end of 2023.

According to the CBN Governor, Yemi Cardoso, the improved position was due to substantial reduction in short-term foreign exchange liabilities, notably swaps and forward obligations.

Cardoso cited measures aimed at boosting forex market confidence and reserves, alongside increased non-oil foreign exchange inflows.

“This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability.

“We remain focused on sustaining this progress through transparency, discipline, and market-driven reforms,” Cardoso said.

He said that Gross external reserves also climbed to 40.19 billion dollars at the end of 2024, up from 33.22 billion dollars the previous year.

“Reserves declined in the first quarter of 2025 due to seasonal factors and foreign debt interest payments, the CBN anticipates a steady uptick in reserves throughout the second quarter,” Cardoso said.

 

How to use $23bn forex reserves to stablise exchange rate, by Uwaleke
(NAN)

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Fuel prices to fall as global cost of crude drops

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1 day ago

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April 6, 2025

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Fuel prices to fall as global cost of crude drops 

Nigerians are expected to pay less for Premium Motor Spirit, also known as petrol, as the price of Brent dropped to $65 per barrel from $69.90 per barrel in the global market.

The price of Brent is used globally to benchmark the prices of other crudes. major feedstocks – and by extension petroleum products prices.

The development was partly fueled by the US President Donald Trump’s announcement of sweeping new tariffs.

This was reportedly fueled by the decision of the Organisation of Oil Producing Countries and its allies to increase oil output by 410,000 barrels per day starting May 2025 far above the 135,000 barrels originally planned.

A report by Vanguard stated that the depot prices of Mainland, A.Y.M and Ever have dropped to N918 per litre from N920 and N919 from N920 per litre, respectively.

Also, the depot prices of Prudent, Eterna and Soroman have dropped to N912 from N913 per litre, N897 from N900 per litre and N915 from N916 per litre, respectively.

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According to petroleumprice.ng, oil marketers would likely adjust their pump prices downwards as they get new supplies this week, if the current market condition persists.

The Vanguard report quoted the President of Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, Billy Gillis-Harry, expressed optimism that the development would culminate in low costs of fares, goods and services if the fundamentals persist in the market.

OPEC stated, “The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman met virtually on 3 April 2025, to review global market conditions and outlook.

“In view of the continuing healthy market fundamentals and the positive market outlook, and in accordance with the decision agreed upon on 5 December 2024, subsequently reaffirmed on 3 March 2025, to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025, the eight participating countries will implement a production adjustment of 411 thousand barrels per day, equivalent to three monthly increments, in May 2025.

“This comprises the increment originally planned for May in addition to two monthly increments. The gradual increases may be paused or reversed subject to evolving market conditions.

“This flexibility will allow the group to continue to support oil market stability. The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation.

“The eight countries reaffirmed their commitment to the voluntary production adjustments agreed at the 53rd Joint Ministerial Monitoring Committee, JMMC meeting on 3 April 2024.

“They also confirmed their intention to fully compensate any overproduced volume since January 2024 and to submit updated front-loaded compensation plans to the OPEC Secretariat by 15 April 2025.”

Fuel prices to fall as global cost of crude drops

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CBN injects $197.71m to boost FX as Trump trade tariff spreads

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1 day ago

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April 6, 2025

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CBN injects $197.71m to boost FX as Trump trade tariff spreads

The Central Bank of Nigeria (CBN) has supplied $197.71 million to the foreign exchange market through sales to authorised dealers.

The apex bank’s director of financial markets department, Omolara Duke, disclosed this in a statement on Saturday in Abuja.

She noted that the intervention aligned with the apex bank’s ongoing commitment to ensuring adequate liquidity and supporting orderly market functioning.

According to Ms Duke, the move reflects the CBN’s broader objective of fostering a stable, transparent, and efficient foreign exchange market.

She said the decision was largely influenced by recent movements in the FX market, driven by the announcement of new U.S. tariffs and declining crude oil prices.

“The CBN has observed recent fluctuations in the foreign exchange market between April 3 and April 4.

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“These are reflective of broader global macroeconomic shifts currently impacting several emerging markets and developing economies.

“These developments stem from the recent announcement by the United States government of new import tariffs on goods from several economies, triggering a period of adjustment across global markets,” she said.

Ms Duke said crude oil prices had dropped by over 12 per cent, falling to approximately $$65.50 per barrel, introducing new challenges for oil-exporting nations like Nigeria.

She said the CBN would continue monitoring global and domestic market conditions.

Ms Duke expressed confidence in the resilience of Nigeria’s foreign exchange framework, which is designed to adjust in line with evolving economic fundamentals.

“All authorised dealers are reminded to strictly adhere to the principles outlined in the Nigerian FX Market Code and uphold the highest standards in their dealings with clients and market counterparties,” she said.

CBN injects $197.71m to boost FX as Trump trade tariff spreads

(NAN)

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