Nigeria to start selling oil in local currency to Dangote refinery from October

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00:00Well Nigeria's finance ministry says that from October the 1st it will start

00:04using local currency to sell crude oil to its homegrown Dangote refinery.

00:10Now the move should make it easier for the facility to operate since it started

00:13production in January it's been struggling to secure enough crude to

00:18meet its 650,000 barrel per day capacity. That's despite Nigeria being the

00:25continent's top oil producer and the Dangote site being one of Africa's

00:29largest. Samuel Okoye joins us now with more. Sam, so first of all why has it

00:35taken so long for the Nigerian government to agree to start selling

00:39Nigerian crude to a Nigerian refinery in Nigerian currency? I mean is not is

00:45everyone not on the same page? Are the country's producers not not keen on this?

00:50Well for obvious reasons they are not keen on this. It has to do with the

00:57quality of the value of the Nigerian currency. It's not stable and it keeps

01:05losing value so for them if you sell today in the local currency then that

01:12currency will lose so much value within days. For example in the last couple of

01:17weeks we've lost quite a good chunk of the value of the Nigerian currency and

01:21that's why the government there's disagreements. Dangote wants to sell

01:26locally to sell to buy the Nigerian currency which will pay for the local

01:33producers they feel is better they either send it abroad or he pays in

01:38dollar so that's been the problem. So you have the producers in Nigeria who

01:42don't want to sell in the local currency because that means they'll get less for

01:46their product but then you have the refinery who wants to buy in the local

01:50currency because that makes it easier for them to access the crude oil that

01:55they're going to refine. The whole plan was to address some of the instability

02:01that Nigeria faces when it comes to sourcing its own gasoline which is crazy

02:06considering that it is the continent's largest oil producer. The refinery has

02:11been going since January. Has it made any difference yet?

02:17The refinery has not made any difference sadly and it boils down to the fact of this

02:24disagreement, inability of both sides the producers and the local refineries to

02:30agree on what currencies to sell. So today Nigeria relies very heavily on

02:35imported petrol. Not just that, since Dangute refinery started production

02:41we've had very serious cases of petrol scarcity. It has gone on for a long time

02:47even as I speak we have problems of petrol scarcity. I think it goes

02:53beyond just Dangute. Nigeria has four refineries and Nigerians will ask that

02:59for a country that has four refineries why is it still produced, why is it still

03:04imported. So the issue is not so much of Dangute, the issue is this local problem of

03:11people not allowing the system to work and Dangute actually

03:17insinuated is that the producers are sending Nigeria's crude oil abroad

03:23especially as you mentioned Malta, sending it to Malta to refineries abroad only to be

03:29imported to Nigeria. So many people, Nigerians will definitely view this with a

03:36degree of cautious optimism whether this will work or not.

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