Economy
Dangote Refinery to Reduce Nigeria’s FX Pressure by 40%
By Adedapo Adesanya
The chief executive of Dangote Group, Mr Aliko Dangote, says the injection of petrol from his 650,000 barrels per day refinery into the domestic market will help ease Nigeria’s foreign exchange pressure by 40 per cent.
This was one of his soundbites from his recent interview with Bloomberg Television in New York earlier this week.
“We will sell the crude in Naira after we have bought in Naira. So now, we are currently working out with the committee that the exchange rate is going to be priced. It is going to be normal pricing, you know, if crude is at $80, we will pay that price at an agreed exchange rate.
“And then, we will also sell in the domestic market. What that will do is that it’s going to remove 40 per cent pressure on the naira. So because see, the petroleum products consume about 40 per cent of foreign exchange, so you know, and then, you know, it’s like you have 40 per cent of demand been taken out so that can actually stabilize the naira and even if they subsidise, they would know what they are paying for,” the businessman said.
He said that the idea was to leverage an agreement that would serve its business operation and the government.
“The deal is to give the government something that they want. It’s also a win-win situation for all and it would benefit the country.
“Currently, discussions are still ongoing to determine the details of the agreement. They are working out something that I think would be a win-win between us and the NNPC.
“The agreement is very robust. Well, first of all, we would have energy security where they will give us crude. For example, in October, they’re going to give us 12 million barrels, which is on average, about 390,000 barrels a day, which will sell both gasoline, diesel, and aviation fuel,” he explained.
He also revealed the details of the pricing disagreement that occurred with the NNPC Limited.
He said the national oil company bought its current stock from the refinery at a cheaper price than its imported fuel but gave a uniform price for all products.
“There wasn’t really a disagreement, per se. NNPC bought from us on the 15th of September at the international price, which they also bought, about 800,000 metric tons of gasoline imported. So the one that they bought from us actually is cheaper than the one they are importing.
“And so when they announced our price, the guy, I don’t know whether he was authorized. It wasn’t really the real price. What they have announced is most likely that is what it cost them, including profit and other expenses.
“And then the other one is one that they imported. But the people don’t know how much they spend in terms of imports, but their importation is almost, maybe about 15 per cent more expensive than ours, you know.
“So what they are supposed to do is to sell at a basket price, or if they want to remove subsidy, they can announce that they will remove subsidy, which is okay, everybody you know will adjust it.”
Mr Dangote said that discussions are still ongoing and a detailed agreement will be finalised this week on the planned crude oil sales anticipated to begin in October.
By Dipo Olowookere
A 0.26 per cent growth was achieved by the Nigerian Exchange (NGX) Limited on Wednesday on the back of sustained bargain-hunting by investors.
This happened despite a pocket of profit-taking, with industrial goods losing 0.63 per cent and the energy index shedding 0.05 per cent.
But the insurance space increased by 2.02 per cent, the banking counter appreciated by 1.48 per cent, the commodity sector improved by 0.48 per cent, and the consumer goods segment rose by 0.03 per cent.
Consequently, the All-Share Index (ASI) went up by 383.71 points to 149,842.82 points from 149,459.11 points and the market capitalisation jumped by N244 billion to N95.525 trillion from N95.281 trillion.
The market breadth index remained positive after the bourse finished with 38 price gainers and 23 price losers, indicating a strong investor sentiment.
The quartet of First Holdco, Lasaco Assurance, Veritas Kapital, and Prestige Assurance gained 10.00 per cent to quote at N39.60, N2.75, N1.76, and N1.65, respectively, while Mecure Industries grew by 9.92 per cent to N50.40.
Conversely, Living Trust Mortgage Bank lost 10.00 per cent to close at N3.15, International Energy Insurance dropped 9.92 per cent to trade at N2.27, McNichols shrank by 6.90 per cent to N2.97, Omatek decreased by 6.84 per cent to N1.09, and Chams dipped by 6.41 per cent to N2.92.
The activity level witnessed a significant surge at midweek, with Ecobank trading 5.3 billion units for N168.7 billion.
Further, First Holdco sold 108.2 million units worth N4.2 billion, Sterling Holdings exchanged 87.3 million units valued at N606.2 million, FCMB transacted 74.3 million units worth N783.6 million, and Access Holdings sold 41.5 million units for N841.4 million.
At the close of trades, market participants traded 5.9 billion units valued at N216.2 billion in 25,205 deals compared with the 1.0 billion units worth N21.8 billion traded in 23,701 deals a day earlier, showing a rise in the trading volume, value, and number of deals by 490.00 per cent, 891.74 per cent, and 6.35 per cent, respectively.
By Adedapo Adesanya
The Naira depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, December 17, by N3.67 or 0.25 per cent, closing at N1,455.49/$1, in contrast to Tuesday’s closing price of N1,451.82/$1.
Also, the local currency weakened against the Euro in the official market at midweek by 98 Kobo to close at N1,706.72/€1 versus the previous session’s price of N1,705.74/€1, but improved against the Pound Sterling by 75 Kobo to trade at N1,943.28/£1 compared with the N1,943.98/£1 it traded a day earlier.
At the GTBank forex counter, the Nigerian currency lost N3 against the greenback to finish at N1,463/$1 versus N1,460/$1 and in the parallel market, it remained unchanged at N1,475/$1.
Thin US dollar inflows from exporters, non-bank corporate, foreign portfolio investors and absence of immediate intervention of the Central Bank of Nigeria (CBN) to strengthen supply triggered fresh pressure.
This is coming off the back of decline in inflows through the Nigerian Foreign Exchange Market which decreased to $716.3 million last week from $844.70 million in the previous week , a 15 per cent drop in a week.
The intervention comes as the CBN expect inflows from Detty December to alleviate need for FX demand, but exorbitant local prices may be keeping spending at bay.
Regardless of the seasonal demand, positive FX support for the local currency through 2025 signals a deliberate action to ensure the local currency maintains the trading range amidst growing external reserves. Latest data showed that gross external reserves position advanced to $45.47 billion, reflecting a 11.2 per cent Year-to-Date (YTD) gain.
In the cryptocurrency market, there was selling pressure as traders liquidated positions amid a short-rally, leading Litecoin (LTC) to slip by 5.2 per cent to close at $75.12m, as Cardano (ADA) depreciated by 5.0 per cent to $0.3619, and Dogecoin (DOGE) lost 4.8 per cent to finish at $0.1247.
In addition, Ripple (XRP) depreciated by 4.7 per cent to $1.83, Solana (SOL) crashed by 4.1 per cent to $122.62, Ethereum (ETH) went down by 3.9 per cent to $2,826.62, Binance Coin (BNB) fell by 3.4 per cent to $833.07, and Bitcoin (BTC) tumbled by 0.5 per cent to sell at $86,436.66, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Adedapo Adesanya
Crude oil prices rallied by more than 1 per cent on Wednesday after the United States President, Mr Donald Trump, ordered a blockade of all oil tankers under sanctions entering and leaving Venezuela.
Brent crude settled at $59.68 a barrel after chalking up 76 cents or 1.3 per cent, while the US West Texas Intermediate (WTI) crude traded at $55.94 a barrel, up 67 cents or 1.2 per cent.
Mr Trump ordered a blockade of sanctioned tankers heading to or departing from Venezuela, the latest move to increase pressure on Nicolas Maduro’s government, targeting its main source of income.
At least 34 US-sanctioned oil tankers with a history of carrying Venezuelan oil are currently at sea in the Caribbean.
Oil market participants said prices were rising in anticipation of a potential reduction in Venezuelan exports, although they were still waiting to see how Trump’s blockade would be enforced and whether it would extend to include non-sanctioned vessels.
The country, which is a member of the Organisation of the Petroleum Exporting Countries (OPEC), has produced around 900,000 barrels of crude oil and condensate so far in 2025, accounting for roughly 1 per cent of the total global supply.
Venezuela could lose up to 500,000 barrels per day of its oil production, according to Reuters estimates. China is the biggest buyer of Venezuelan crude, which accounts for roughly 4 per cent of its imports, with shipments in December on track to average more than 600,000 barrels per day.
While many vessels picking up oil in Venezuela are under sanctions, others transporting the country’s oil and crude by way of Iran and Russia have not been sanctioned.
Crude oil inventories in the US decreased by 1.3 million barrels during the week ending December 12, after losing 1.8 million barrels in the week prior, according to new data from the U.S. Energy Information Administration (EIA) released on Wednesday.
The EIA’s data release follows figures by the American Petroleum Institute (API) that were released a day earlier, which suggested that crude oil inventories fell by a massive 9.2 million barrels.
For total motor gasoline (petrol), the EIA reported that inventories had increased by 4.8 million barrels, on top of the 6.4 million barrel gain in the week prior. For middle distillates, inventories increased by 1.7 million barrels, with production easing by 228,000 barrels daily to an average of 5.2 million barrels daily.
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