viyon02:
From my analysis, if Fg actually want to crush the dollar, it will done in no time, but because of some evil politicians dollar still remain higly esteemed. The fact is, we know solution to our problems.

Lol even Saudi Arabia no crush dollars...Ii wonder where you get your analysis from sha...Colorado analysis...lol

Kenochi:
I have read most comments on this thread and I have to be honest,the discussion is very robust,no insults just plain economics,this is how decent discussions should be,you leave the thread more informed and educated
I strongly believe that based on this news alone,the naira might have a strong rally
There was this apprehension that Dangote might charge in dollars for some products but this is a very good move
The second checkmate that will sustain the rally o the naira is if the Nigerian government and Dangote can work out a payment system for his crude oil that will not put further strain on the Naira
If the two measures are put in place,it will release a lot of pressure on the demand of Dollars
I repeat,those hoarding dollars will soon drink garri with their dollars,it is not a prophecy it is simple economic reality
Once you cut off the head of the snake(buying and selling of Refined products in foreign currency),the body will have a calm sleep

Good analysis from a different point

But Nigeria is still an import dependent country

Most things are imported apart from crude oil and the population is still growing and it is going to take.a lot of low interest loans to fund Nigerian domiciled companies
that would substitute and produce and sell in Nigeria goods and services that used to be imported to ensure imports are down at least 80 percent

Petrol aside

Nigeria is not meeting up with is quota in OPEC so selling to Dangote will still reduced our crude sales by so our forex will reduce.secondly if Dangote buys in dollar and sell dollar where will Dangote get the dollar to buy crude from? Something is still wrong somewhere.the best deal is for Dangote to sell in naira and buy in naira also

Paraman:


https://www.google.com/amp/s/punchng.com/marketers-will-pay-naira-for-dangote-fuel-says-ipman/%3famp

Elo lo bade!

Too much story......in simple terms how much per litre of PMS at the fuel stations nation wide?

Most of these figures are based on over inflated invoices signed off by corrupt civil servants working hand in hand with crooked businessmen.

So yes, some of that will expenditure will drop but don't deceive yourself that the civil servants, crooked businessmen and corrupt politicians will not find other ways to siphon money away.

They will.

If you doubt me, ask what happened to the savings from "fuel subsidy".

Let me know when you find where it is being used to improve the lives of the people.

Paraman:
Nigeria spent over $10 billion importing refined crude last year, If the Dangote refinery can take care of Nigeria needs, are you telling me will still be dashing out over $10 billion dollars to foreign refiners?

In 2022, we spent about $21 billion importing oil

Please explain, I want to learn.

ivolt:

First, Nigeria does not dash out any money.
It buys goods it needs at international price.

The government get its forex primarily from oil export.
If Dangote refinery sells in Naira, it means it will pay for the crude it buys
from the NNPC in Naira too.
So, the government will be getting less forex than it used to unless it strictly
sells to Dangote from increased crude production.
Of course, some forex will be saved in the process due to the extra value created
and also shipping costs assuming Dangote can produce at a competitive rate.

This only applies to local market, whatever Dangote export is a positive for the government.

Dangote doesn’t buy solely from FG. He buys from other oil companies and they sell to him in Naira since they are all based in NIgerDelta.
With increase in government’s crude oil production, FG can sell internationally, make $$$$$, and also sell to Dangote and make Naira.

The refinery would, significantly, help strengthen Naira because as FG was making Dollar before, so it was dishing it out to importers and that would stop.

I am sure before the end of 2025, Nigeria’s oil production would reach 1.8million bpd, at least.

Indifferent12:

It’s the only thing that will save Nigeria at the moment, but the choice is left for dangote group to make not ipman.
Giving that the refinery was built in a free trade zone, I don’t see how dangote will sell in naira, unless NNPC provide crude oil to dangote in naira

Are the Nigerian oil marketers that would be buying from Dangote based outside Nigeria?
Please justify why they would buy in foreign currencies.
Do we spend another currency other than Naira? Do you know what they call Free Trade Zone at all? May be it’s because Lagos’s Free Trade Zone is situated close to the ocean. That’s why you think every trade zone must export or sell in foreign currency.

You better go back to JSS 1 and start schooling again.

So if Kogi State or Plateau state could have free trade zone now with many manufacturing companies there, does it mean that anything produced there has to be sold in foreign currencies?
Go and find out the meaning of free trade zone e and the reasons why governments set them up.

coleon:

I will help him out to explain to you since you clearly want to learn.
Nigeria will not be saving anything close to $10bn even if Dangote does sell his products to marketers in naira.
For every barrel of crude oil Nigeria gives to Dangote to refine a price is being paid in FX i.e whether Nigeria gives it to dangote to refine and pay back in naira the alternive forgone is what could have been earned in FX if exported .
Now if Dangote sells to marketers in NGN and he repays NNPC in NGN it means Nigeria net FX revenue from crude oil sales will reduce as a result of production.
Where Nigeria will gaina little is because one barrel or crude oil is not one barrel of petrol hence we have to maximally turn all the constituents of crude oil to money and other constituents we can export to enable Dangote recover some FX to settle his loans but it's nothing close to your $10bn savings at all.

Not all Dangote’s loan is denominated in foreign currencies.

And not the whole $20billion investment in the refinery is on loan.
The valuation was just done in $$ for economic purposes and for comparison sake.

Dangote would gain more when repaying his loan due to improved Naira. Don’t forget that he won’t pay with Aboki rate.

Assuming he borrowed when one USD was selling, officially, at N750 and he is paying when one USD is selling, officially, at N600 has he not gained?

Once his refinery is able to help strengthen Naira, he will always be a gainer because he would need less Naira to be converted to foreign currencies to repay any of his loans denominated in foreign currencies.

A lot of people here just love forming/turning to overnight economists once they hear about Dangote and his refinery. They would start propounding economic theories being used in the land of rising sun because of the 8red they have for that Northern guy called Aliko. And they like regurgitating and repacking the same theories being used in their 2 by 4 shops.

Come and hear what they say all over obodo oyibo. So bitter. Once they enter any Nigerian shop or gathering like this, especially their 3ibal shops or gathering, na Tulumbu and Dangote be their topic.
They love to see things fail for those two men.

Instead for us to be happy that someone is trying to help us revive our economy and reduce inflation.

Urgent1Million:




It makes no difference.
He'll sell in the naira equivalence of the dollar rate that'll make him the desired profit, plus a reasonable margin for inflation since he'll go back to buy crude in dollars.
Trust me, it'd have been better he sold in dollars.
Dangote is a businessman and should not be mistaken for a father Christmas.

Chief Assumption Officer - Dangote Refineries Ltd.

See how you wrote as if you have insider info about Dangote’s pricing template.

Gibberish. That’s your wish. Businesses don’t run that way. Babyish assumption.

seborrhic:

There is nothing good about the report because if you read the entire story you would realise the marketers are also not sure yet the currency it would be sold in.

What currency is used to buy his cement locally? ... what currency is used to buy ars locally? ... what currency is used to buy imported petrol locally? The ones asking that question be lacking in common sense.

Godoverevery:


Exporting to majority of west African countries is the deal here for dangote.

Upon all the exporting ,what advantage does it have to common man?Ordinary Benin Republic wey no get anything their currency still more valuable than Nigeria,with all the mineral resources.

seborrhic:

There is nothing good about the report because if you read the entire story you would realise the marketers are also not sure yet the currency it would be sold in.

Do you expect Dangote to transact in dollar within Nigeria? Crude oil wasnt only resources Dangote import to nigeria for his business,there are other resources he imported in dollar but still transacts within Nigeria in naira.

Paraman:
Nigeria won't need to spend over $10 billion importing refined crude again. It will have a positive effect on the naira on the short, medium and long run

$20B

MeineMutter:


Dangote doesn’t buy solely from FG. He buys from other oil companies and they sell to him in Naira since they are all based in NIgerDelta.
With increase in government’s crude oil production, FG can sell internationally, make $$$$$, and also sell to Dangote and make Naira.

The refinery would, significantly, help strengthen Naira because as FG was making Dollar before, so it was dishing it out to importers and that would stop.

I am sure before end of 2025, Nigeria’s ooo production would reach 1.8million bpd, at least.

When I say buy from FG, I don't mean FG operates any oil mine.
In fact all oil mines are in private hands.
However, NNPC have mediates all the crude that have been shipped to Dangote so far.

No oil company will sell in Naira unless the government mandate them to and for
those where significant stake are held by foreigners, they will also need to repatriate
some funds in dollars.

No one is saying Dangote won't have any effect on Forex but it is not like:
we used to import 10 billion dollar of oil before, therefore refining locally means we are
saving $10 billion dollars. Not even close.
Unless it cost zero dollars to produce and refine the fuel.

Dynamicboss:


Good for naira. Recall that fuel importation requires forex (USD, Euro, etc.) to purchase

Atleast some pressure will be off the local currency

not just some pressure will be lifted but close to 40% of forex demands comes from petrochemical importation,plastics and fertilizer raw material which will be supplanted locally with the start of this megafactory it is just what the doctor ordered

Laird:


Good analysis from a different point

But Nigeria is still an import dependent country

Most things are imported apart from crude oil and the population is still growing and it is going to take.a lot of low interest loans and effort to ensure imports are down at least 80 percent

Petrol aside

I was waiting for this comment as I didn't want to flood the thread.

The primary advantage we have based on Dangote's refinery is there might be no more scarcity of petroleum products.

Aside that, Dangote is a business man. Plain simple. If it was easy to build a refinery, others would have done it.

Dynamicboss:


Good for naira. Recall that fuel importation requires forex (USD, Euro, etc.) to purchase

Atleast some pressure will be off the local currency

As you rightful explained, it is good for Nigeria.
The only thing is that we should keep our fingers crossed, watch and see the real live impact, hopefully positive. Why? In the case of naija, it is always different. It does not follow logic. While this will cause other countries currencies to appreciate and economy improve, similar fits in the past have had rather the opposite effects in our own case.

coleon:

I will help him out to explain to you since you clearly want to learn.
Nigeria will not be saving anything close to $10bn even if Dangote does sell his products to marketers in naira.
For every barrel of crude oil Nigeria gives to Dangote to refine a price is being paid in FX i.e whether Nigeria gives it to dangote to refine and pay back in naira the alternive forgone is what could have been earned in FX if exported .
Now if Dangote sells to marketers in NGN and he repays NNPC in NGN it means Nigeria net FX revenue from crude oil sales will reduce as a result of production.
Where Nigeria will gaina little is because one barrel or crude oil is not one barrel of petrol hence we have to maximally turn all the constituents of crude oil to money and other constituents we can export to enable Dangote recover some FX to settle his loans but it's nothing close to your $10bn savings at all.

Thank you for this explanation..This was how Nairaland was B4 it became toxic.

Indifferent12:

I doubt he will sell in naira tho, and besides it’s the crude oil sales we use to make dollars, we will no longer have crude oil sales to make 10 billion dollars because we will be giving the crude oil to dangote to refine.
Our crude oil exports will drop drastically and we will no longer make that 10 billion dollars u are talking about

Dangote crude is NOT affecting our previous export please, it's like a new market or customer.

Nbote:


Atleast the little I know is that we won't now have to pay USD for that volume of Petroleum products we would have imported. Now ordinarily price of these products are supposed to be lesser now because duty and other importation costs won't be paid

who said they pay duty for imported pms

I no fit read all those things abeg. But, will him still be buying in naira?

Nbote:


Atleast the little I know is that we won't now have to pay USD for that volume of Petroleum products we would have imported. Now ordinarily price of these products are supposed to be lesser now because duty and other importation costs won't be paid

But the thing is that the price will still be costly despite buying in naira and excuses will still be given. That's just the problem we are facing

Dynamicboss:


Good for naira. Recall that fuel importation requires forex (USD, Euro, etc.) to purchase

Atleast some pressure will be off the local currency

You sabi book

longetivity:
When will Dangote fuel hit the market

Hopefully next month but for now we are looking at AGO and JetA1

MeineMutter:


Are the Nigerian oil marketers that would be buying from Dangote based outside Nigeria?
Please justify why they would buy in foreign currencies.
Do we spend another currency other than Naira? Do you know what they call Free Trade Zone at all? May be it’s because Lagos’s Free Trade Zone is situated close to the ocean. That’s why you think every trade zone must export or sell in foreign currency.

You better go back to JSS 1 and start schooling again.

So if Kogi State or Plateau state could have free trade zone now with many manufacturing companies there, does it mean that anything produced there has to be sold in foreign currencies?
Go and find out the meaning of free trade zone e and the reasons why governments set them up.

You are definitely an illiterate, things produce in the free trade zone are mainly produced for export, that’s why govt set up free trade zone.
What every currency the company decides to sell their products is up to them, but what u should know is that if anyone set up their factory in a free trade zone, it means their plan is to export such products.

Now speaking of dangote, he’s working with crude oil, which is sold in dollars world wide. As a Business man will you buy crude oil in dollars and sell refined products in naira?
You should be truthful to yourself.
Dangote group is a business organization, not a charity organization.
Unless NNPC can provide crude oil for dangote in naira or dangote can some how get crude oil in naira, he has no reason for selling in naira.

ericmor:


But the thing is that the price will still be costly despite buying in naira and excuses will still be given. That's just the problem we are facing

I don’t care if the price is costly, if he’s selling in naira, it will give the naira some reasonable value which will be good for our economy. If we can fixed our electricity the demand for fuel will reduce drastically, what we need is a good power supply not cheap fuel.

Originalsly:


What currency is used to buy his cement locally? ... what currency is used to buy ars locally? ... what currency is used to buy imported petrol locally? The ones asking that question be lacking in common sense.

What currency does dangote use to buy lime stone?

Nbote:


Atleast the little I know is that we won't now have to pay USD for that volume of Petroleum products we would have imported. Now ordinarily price of these products are supposed to be lesser now because duty and other importation costs won't be paid

Wrong duty will be paid..the refinery is located in a free trade zone..you will need to pay duty on commodities coming out from a free trade zone.

Good news

Magnetic010:
For those that understand economics more, is this good or bad for our naira?

Of course it's good for the Naira..

Indifferent12:

You are definitely an illiterate, things produce in the free trade zone are mainly produced for export, that’s why govt set up free trade zone.
What every currency the company decides to sell their products is up to them, but what u should know is that if anyone set up their factory in a free trade zone, it means their plan is to export such products.

Now speaking of dangote, he’s working with crude oil, which is sold in dollars world wide. As a Business man will you buy crude oil in dollars and sell refined products in naira?
You should be truthful to yourself.
Dangote group is a business organization, not a charity organization.
Unless NNPC can provide crude oil for dangote in naira or dangote can some how get crude oil in naira, he has no reason for selling in naira.

Olodo ni e. In the first instance, who told you Dangote is buying fuel in Dollar from NNPC and others?

So all those companies in Lagos Free Trade Zone export their products abroad? They sell none to Nigeria and they sell in foreign currencies?
Ask the most knowledgeable person in your city and less see if he or she can help you out.

Free trade zone is not solely set up for export. It’s set up to encourage establishment of industries, exportation, and majorly to eliminate certain trade barriers ( like tariffs, taxes etc) being meted on companies outside the free trade zone.

So it’s like an incentive to organizations and companies to come and do what government cannot do.

I don’t blame you sha. It’s internet, faceless forum like this and data that allow people like you to dey yarn okpata.

No wonder!

You better go and help him sell to Nigerians in Dollars.
Omo iran ki’ran.

ivolt:

When I say buy from FG, I don't mean FG operates any oil mine.
In fact all oil mines are in private hands.
However, NNPC have mediates all the crude that have been shipped to Dangote so far.

No oil company will sell in Naira unless the government mandate them to and for
those where significant stake are held by foreigners, they will also need to repatriate
some funds in dollars.

No one is saying Dangote won't have any effect on Forex but it is not like:
we used to import 10 billion dollar of oil before, therefore refining locally means we are
saving $10 billion dollars. Not even close.
Unless it cost zero dollars to produce and refine the fuel.

Retract your statement. Any crude oil explored in Nigeria and sold to any Nigerian company on Nigerian soil is never sold in foreign currencies.
The price of such sale could have been in an equivalence of Dollar cost of sale plus a little margin because the landing cost in Nigeria will be lower than landing cost for someone buying the oil in Europe or Asia.

Indifferent12:



What currency does dangote use to buy lime stone?

It's not about what currency the distributer uses to source the product .... it's about the currency the product is offered for sale in Nigeria.