Dangote Refinery has cleared the air on the deal it had with the Nigerian National Petroleum Company Limited (NNPCL), countering the alleged N898 per litter deal. The company disclosed that it sold Premium Motor Spirit (PMS) in dollars.

Anthony Chiejina, Group Chief Branding and Communications Office of Dangote clarified the acclaimed N898 per liter deal with the Nigerian National Petroleum Company Limited (NNPCL).

Dangote Refinery said, “Our attention has been drawn to a statement attributed to NNPCL spokesperson, Mr. Olufemi Soneye, that we sell our PMS at N898 per liter to the NNPCL.

“This statement is both misleading and mischievous, deliberately aimed at undermining the milestone achievement recorded today, September 15, 2024, towards addressing energy insufficiency and insecurity, which has bedeviled the economy in the past 50 years.

“We urge Nigerians to disregard this malicious statement and await a formal announcement on the pricing, by the Technical Sub-Committee on Naira-based crude sales to local refineries, appointed by His Excellency, President Bola Ahmed Tinubu GCFR, which will commence on October 1, 2024, bearing in mind that our current stock of crude was procured in dollars.

“It should also be noted that we sold the products to NNPCL in dollars with a lot of savings against what they are currently importing. With this action, there will be petrol in every local government area of the country regardless of their remote nature.

“We assure Nigerians of availability of quality petroleum product and putting an end to the endemic fuel scarcity in the country.”

Google, Netflix, Facebook and other foreign companies operating in Nigeria paid N2.55tn in taxes to the Federal Government in the first six months of 2024, representing an increase of 158.76 percent from N985.27bn collected in the preceding period of 2023.

The figure includes Company Income Tax (CIT) and Value Added Tax (VAT), collated from data obtained from the National Bureau of Statistics.

According to the Federal Inland Revenue Service, CIT is a 30 percent tax imposed on companies’ profit, and VAT is a 7.5 percent consumption tax paid when goods are purchased, and services are rendered and borne by the final consumer.

In 2020, the Federal Government had indicated plans to begin tax collection from foreign digital service providers offering services and earning revenue in naira due to its high acceptance by the Nigerian populace.

Some of these service providers, which are video streaming sites, social media platforms, and companies that offer downloads of digital content, are expected to pay digital tax to the Federal Inland Revenue Service.

Netflix, Facebook, X (formerly Twitter), among others, which have been operating without a physical office in Nigeria, offer digital video and advertising services to Nigerians.

Others, like Alibaba and Amazon, generate revenue from Nigeria by processing and transmitting data collected about users in Nigeria, providing goods or services directly or through a digital platform, or offering intermediate services that link suppliers and customers in Nigeria.

Also, in January 2022, the Federal Government disclosed that it would charge offshore companies providing digital services to local customers in Nigeria a six percent tax on turnover as provided in the 2021 Finance Act.

A breakdown of the reports showed that the companies paid N1.72tn as CIT while N831.47bn was collected as VAT between January and June 2024. Nigeria’s earnings from CIT increased by 87.2 percent from N598.13bn in Q1 to N1.12tn in Q2.

Checks further revealed that the amount was the highest sum paid by the companies, contributing more than 45.3 percent to the N2.4tn collected in the second quarter.

A breakdown of VAT showed that Nigeria earned N435.73bn in Q1 and N395.74 in Q2, marking a reduction of N39.99bn.

On Tuesday, the Minister for Finance and Coordinating Minister of the Economy, Wale Edun, revealed that the Federal Government’s revenue for the first quarter of 2024 increased to N9.1tn, more than doubling the amount recorded in 2023 without increasing taxes.

The Nigerian National Petroleum Company (NNPC) has expressed interest in securing a permanent presence at the Dangote Refinery in Lagos, as part of a proposed crude oil supply deal, Devakumar Edwin, vice president of Dangote Industries Limited has said.

“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 in a Twitter Spaces session organised by Nairametrics.

Edwin explained that talks with the NNPC are focused on a new crude supply model, in which the refinery would purchase crude from the government in Naira and sell PMS in the same currency, instead of using dollars.

He said that negotiations are still in progress, with key issues such as crude pricing and the Naira exchange rate yet to be settled.

“We are still in talks with the government about receiving crude in Naira. The discussions are ongoing, and nothing has been finalized yet. Some unresolved issues include the pricing of crude, the pricing mechanism, and determining the appropriate exchange rate for the Naira,” he said.

This change represents a major shift from the refinery’s initial business model as a free zone entity, which was intended to conduct transactions in dollars.

Edwin said that Aliko Dangote agreed to the federal government’s suggestion to sell NNPC products to the government in Naira, even though this could result in financial losses.

According to Edwin, Dangote said the critical need for foreign exchange and the deteriorating value of the Naira as key factors in his decision to proceed with the deal.

“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 stated that in his commitment to the national cause, Dangote 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.”