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.”

FBN Holdings has sought to clarify the recent divestment from its Merchant Banking business.

According to the lender, all its businesses and entities apart from the Merchant Banking business are not included in the divestment deal.

It said, “We wish to clarify that all other entities and businesses listed below are not included in the divestment, and they remain subsidiaries of FBNH and are well integrated into the Group’s strategic focus.”

The subsidiaries are FBNQuest Capital Limited, FBNQuest Asset Management Limited, FBNQuest Trustees Limited, FBNQuest Funds Limited, and FBNQuest Securities Limited.

“We reiterate that the divestment pertains solely to FBNQuest Merchant Bank Limited, with no impact on the continued operations or strategic positioning of our other subsidiaries within the Group,” the bank stated in a release signed by Adewale L.O. Arogundade, Acting Company Secretary.

Dangote Oil Refinery, the largest in Africa, has set its sights on capturing Nigeria’s $267.7 million polypropylene market starting next month, Aliko Dangote, president of the group said, as its largest oil and gas project edges closer to full operational status.

The refinery, part of the vast Dangote Industries conglomerate, is expected to reduce Nigeria’s reliance on imported polypropylene—a crucial raw material in various industries, including packaging, textiles, and automotive parts.

“Let me assure you of one thing, Nigeria from October will not import any more polypropylene, which used to be about a quarter of a million tons,” he said. “No more imports of polypropylene.”

Polypropylene, a versatile plastic used in a wide range of applications from packaging and textiles to automotive parts and medical equipment, is currently imported in large quantities by Nigerian manufacturers.

Annual polypropylene import into Nigeria is estimated at $267.7 million, according to TradeMap, which peaked at $407 million in 2022.

The latest data by the National Bureau of Statistics (NBS) revealed that the country brought in the product valued at N99.6 billion in the first quarter (Q1) of this year, placing it at number 12 on the top 15 products imported by Nigeria from the rest of the world.

“We will satisfy the market 100 percent,” said Dangote. “This is so because these industries that are struggling and having to go and look for FX that they will not get and still have to keep stock for four or five months because it’s not easy shipping, clearing, and whatever, can buy as they need.”

He noted that the refinery is determined to do this because it will reduce the cost of importation and scramble for foreign exchange.

“We are also in the business. And our demand also as Dangote is huge. We have Dangote Packaging and are one of the biggest demand users of polypropylene,” he added.

Saudi Arabia, South Africa, South Korea, China, and Vietnam were the top importers of polypropylene into Nigeria in the first quarter of 2024, covering 90 percent of Nigeria’s demand.

Polypropylene is a versatile plastic used in a wide range of packaging applications. It’s often preferred over materials like cellophane, metal, and paper due to its flexibility, durability, and cost-effectiveness.

It is used in food and confectionery, tobacco, and clothing industries in flexible form while in rigid form, polypropylene can be found in caps, closures, pallets, crates, bottles, JIT storage solutions, and containers for products like condiments, detergents, toiletries, and yogurt.

Polypropylene’s versatility and benefits make it a popular choice for packaging across many industries.

“The polypropylene market is growing rapidly owing to the rising demand from the packaging industry. This high demand is associated with the increasing consumption of packaged food and beverages,” said Fortune Business Insights, a research firm.

“It also helps in reducing the possibility of food deterioration and quality loss.”