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State-owned Nigerian National Petroleum Company (NNPC) has secured a $3 billion crude oil repayment loan from Egypt-headquartered African Export-Import Bank (Afreximbank) to support the government’s reforms to stabilise the exchange rate market.
The loan will provide some immediate disbursement, enabling the NNPC to support the federal government in its ongoing fiscal and monetary policy reforms, the company said on the messaging app X (formerly Twitter).
As a result of this initiative, a strengthened Naira will lead to a reduction in fuel costs, the oil firm stated, adding that the fuel cost will drop and further increases will be halted if the naira appreciates.
NNPC said that a stronger naira will result in lower prices from the current level, making subsidies unnecessary, adding the deregulation policy remains unchanged.
The loan will be repaid against a fraction of proceeds from future crude oil production.
“It’s a strategic move that ensures a balance between our current economic needs and future production capabilities,” NNPC stated.
(Writing by P Deol; Editing by Anoop Menon)
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