Forex Crisis: NNPC’s $3 Billion Emergency Loan Unrelated to Crude-For-Refined Products Swap- Presidential aide

Ajuri Ngelale and O’tega Ogra, two of President Bola Tinubu’s media aides, have clarified the $ 3 billion emergency crude repayment loan obtained by the Nigerian National Petroleum Company Limited (NNPCL) on Wednesday.

According to a Gistlover report published on Wednesday, the Nigerian National Petroleum Company (NNPC) Limited secured an urgent $3 billion crude oil repayment loan to help stabilize the country’s exchange rates in response to the current forex crisis affecting the oil and gas sector.

The trade finance bank for Africa, AFREXIM Bank, provided $3 billion, according to the NNPCL, which announced this via Twitter.

NNPCL wrote, “Relief For The Naira: NNPC Ltd Secures $3billion Emergency Crude Repayment Loan from AFREXIM Bank.

“The NNPC Ltd. and @afreximbank have jointly signed a commitment letter and Termsheet for an emergency $ 3 billion crude oil repayment loan

“The signing, which took place today at the bank’s head office in Cairo, Egypt, will enable the NNPC Ltd. to receive some immediate disbursement. to aid the federal government in its ongoing changes to the monetary and fiscal policies with the goal of stabilizing the exchange rate market.

But in less than a day, rumors have started to circulate about the commercialized oil company securing such a sizable loan on the government’s behalf.

But giving more information about the NNPCL loan, official spokesperson and special adviser to the president on media, Ajuri Ngelale, took to the microblogging site Twitter to clarify that the oil company took the loan to pay taxes and royalties in advance and give the FG dollar liquidity to stabilize Naira through incremental releases in accordance with government needs.

This is a significant safeguard against the requirement to participate in the subsidy regime once more, he said.

O’tega Ogra, the Senior Special Assistant to the President on Digital and New Media, shed more light on the situation by stating that the loan is not a swap of crude for refined products but rather an upfront cash loan secured by the proceeds of a small amount of potential future crude oil production.

According to Ogra, who was quoted by Nigerian Tribune, the funding would be made available in stages or tranches based on the specific demands and needs of the Federal Government.

“This is not a crude for refined products agreement where the government does not receive any proceeds from the swap,” the speaker argued.

The loan will be repaid with a portion of future crude oil production profits. It’s a calculated move that ensures a harmony between our present-day economic requirements and potential production capacities.

Ogra continued, “A strengthened Naira as a result of this initiative will lead to a reduction in fuel costs even though the deregulation policy remains in place. This indicates that if the value of the Naira increases, the price of fuel will decrease and further increases will be stopped. “.