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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.