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Crude supply drags as NNPC slows modular refineries’ approval

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Operators of modular refineries are facing a major setback as they encounter resistance from the Nigerian National Petroleum Company (NNPC) in a bid to secure alternative crude oil supplies.

Nigeria’s position as Africa’s biggest oil producer should logically confer the benefits of ample supply to its local refiners. However, the reality is starkly different.

Leaked memos and extensive interviews with industry insiders showed the state-owned company is foot-dragging on approvals for modular refineries to seek alternative crude oil supplies.

Modular refineries are simplified refineries with significantly less capital investment than traditionally full-scale refineries.

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Insiders said the red tape is a death knell for modular refineries struggling to survive amid funding drought, as foreign investors withhold their money due to a lack of guaranteed crude oil supply.

A leaked memo seen by BusinessDay showed AIPCC Energy Limited, owners and operators of the Edo Refinery and Petrochemicals Company Limited (ERPCL), has faced significant operational hurdles due to the persistent lack of crude oil supply despite being a fully functional 1,000 barrels per stream day crude oil refinery located in Ologbo, Edo State.

The company has existing crude oil supply agreements with Seplat and ND Western since 2022, but bureaucratic bottlenecks have prevented the refinery from accessing the much-needed resource.

ERPCL’s letter addressed to Mele Kyari, group chief executive officer of NNPC, alleged the company has been in constant communication, sending letters and having meetings with the NNPC since 2021.

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“On 18th August 2021, our team led by our chairman, met with you and your top management team to discuss our intention to buy crude oil from NNPC and we immediately wrote to the NNPC, seeking crude supply,” the letter dated 22 July 2024 said.

It added, “In July 2022, the representatives of NNPC (from HQ Abuja and NPDC Benin) visited our facility for site inspection and to confirm the mechanical completion of the Edo refinery. In September 2022, we were invited for a commercial negotiation meeting with the NNPC Head of terms, after which we sent a follow-up letter identifying the oil fields from which we can offtake crude oil.

“In March 2022, we also wrote to the Ministry of Petroleum Resources, informing it of our refinery status, future projects and our challenges of lack of crude oil supply to our refinery. We had also written to and had a meeting with the NNPC Exploration and Production Limited (NEPL) between November 2022 and March 2023, indicating our severe need for crude oil supply from oil fields where NEPL has equity stakes.”

ERPCL noted that despite these correspondences and communications with NNPC over the past three years on the issues of crude oil supply, it has succeeded.

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ERPCL also has a Crude Oil Supply Agreement with ND Western to lift crude oil from the Ughelli Pumping Station (UPS) owned by NEPL and operated by Shoreline.

“We have held several meetings with Shoreline and Heritage Oil and indicated our readiness to make modifications needed to offtake crude oil from the UPS but no progress has been made till date,” ERPCL.

The owners of ERPCL seek Kyari intervention as group CEO of NNPC for NUIMS to give occurrence to the Seplat-ERPCL agreement to enable Edo refinery to start lifting crude oil from Oil Mining License 53.

They also want Kyari’s intervention for NEPL and shoreline to allow Edo refinery to start lifting ND Western’s crude oil from the Ughelli pumping station.

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Nigeria currently boasts 25 licensed modular refineries. Five are operational, producing diesel, kerosene, black oil, and naphtha.

OPAC and Aradel have the highest capacities among the five working refineries at 11,000 and 10,000 bpd respectively, while Duport has the lowest at 2,500 bpd. Edo Refinery and Waltersmith fall in between, with capacities of 1,000 and 5,000 bpd, respectively.

About 10 are in various stages of completion, while the others have only received licences to establish. The rest remains stalled due to the unavailability of crude and other issues.

The CEO of another modular refinery, who pleaded anonymity, stated that modular operators had raised concerns severally in the past that some mafias in the oil sector were bent on stopping in-country refining of crude oil for the production of Premium Motor Spirit, popularly called petrol but received no positive feedback, stressing that the chairman of Dangote Petroleum Refinery just re-echoed it last month.

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“No modular refinery has received a barrel from NNPC despite engagement since 2020,” he said.

Eche Idoko, the publicity secretary of Crude Oil Refinery Owners Association of Nigeria (CORAN), advised the federal government to treat indigenous refiners right, given that foreign investments are no longer flowing into the sector.

“In the last eight years, no major foreign investments had been recorded,” Idoko said.

He noted that five CORAN members have completed their refineries.

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“The others are having a major challenge. This challenge is that the people who are supposed to finance them have not disbursed financing for construction because they want some level of guarantee,” he said.

“A guarantee that if they finish the refinery, they are going to get feedstock, which, of course, is crude oil,” Idoko said.

Industry experts say the economic impact of this inadequate supply is profound.

BusinessDay findings showed that agriculture and manufacturing, which depend heavily on diesel and other refined products, suffer from high operational costs due to exorbitant fuel prices.

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The National Bureau of Statistics (NBS) reported a 20 percent increase in food prices over the past year, a trend directly linked to high diesel costs driven by insufficient local refining capacity.

Moreover, the high cost of diesel, which peaked at N1,800 per litre early this year, places a heavy burden on logistics and transportation, further driving up the cost of goods and services. The coming of the Dangote Petroleum Refinery forced the price to N1,200/litre in April.

Last Monday, the Federal Executive Council (FCE) approved a proposal by President Bola Tinubu directing the NNPC to sell crude oil to Dangote Petroleum Refinery and other modular refineries in naira.

Idoko believes this move will boost domestic refining capacity and ultimately reduce fuel prices for consumers. However, he emphasised the need for concrete actions to back up the announcement.

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“Regulatory bodies need to provide detailed guidelines for the policy’s implementation,” Idoko said.

Credit: BusinessDay

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Economy

SEE Black Market Dollar to Naira Exchange Rate Today – 7th May 2025

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The dollar to naira rate keeps making headlines, and if you’re here, chances are you’re looking for today’s black market exchange rate – Wednesday, 7th May 2025. Whether you need to exchange dollars for business, personal use, or just want to stay updated, this post gives you the most accurate and up-to-date info on the dollar to naira rate in the parallel (Aboki) market.

We understand how quickly things can change in Nigeria’s forex market, so we’re committed to bringing you real-time figures and what’s influencing them.

What is the dollar-to-naira exchange rate on the black market, like the Aboki Fx?
The exchange rate for the US dollar (USD) to Nigerian Naira (NGN) in the parallel market, also known as black market, as of 7th May 2025, is N1,610 for 1 USD.

This rate is often sourced from the latest data provided by Bureau De Change (BDC) operators.

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How much is a Dollar to Naira today in the Black Market?
What is the Dollar to Naira Exchange Rate at the Black Market, especially the Aboki Fx?
Because of the dynamics of supply and demand in the informal foreign exchange market, the Central Bank of Nigeria (CBN) official rates often differ significantly from those in the black market.

As of today, 7th May 2025, the black market buying rate for the US dollar is N1,600 while the selling rate is N1,610.

These rates change from time to time during the day, influenced by various factors including economic conditions, market speculation, and government policies.

The dollar-to-naira exchange rate in the black market has continued to fluctuate, reflecting the economic challenges and forex shortages in Nigeria.

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In contrast to the black market, the Central Bank of Nigeria (CBN) maintains an official exchange rate. Today, the CBN rate for one dollar is N1,606.64.

The disparity between the official and black market rates highlights the pressure on the naira and the challenges in the country’s forex market.

Black Market Exchange Rate Today

Foreign Currency Buying rate Selling rate
DOLLAR ($USD) N1,600 N1,610
POUNDS STERLING (GBP) N2,120 N2,140
EURO (EUR) N1,780 1,800

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CBN Exchange Rate Today
Foreign Currency Buying rate Selling rate
DOLLAR ($USD) N1,605.64 N1,606.64
POUNDS STERLING (GBP) N2,150.27 N2,151.61
EURO (EUR)
N1,823.68

N1,824.82

YUAN (CNY)
N222.49

N222.63
SAUDI RIYAL (SAR)
N428.07

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N428.34

CRYPTOCURRENCY
At the time of posting

BITCOIN

1 BTC: NGN153M

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1 NGN = 0.000000078BTC

ETHEREUM

1 ETH: NGN 2.9M

1 NGN: 0.00000034ETH

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Variations in Forex Rates
Forex rates in Nigeria vary across different markets and platforms. The black market, official CBN rates, and rates offered by commercial banks and international money transfer operators all differ.

This discrepancy creates arbitrage opportunities and poses challenges for businesses and individuals needing foreign currency for legitimate transactions.

50 Dollars to Naira Today Black Market
For people looking to exchange 50 US dollars today, the rate in the black market will be approximately N80,000 if obtained at the buying rate of N1,600 per dollar.

For those buying from retailers, it would cost N80,500 at the selling rate of N1,610 per dollar.

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100 Dollars to Naira Today Black Market
Exchanging 100 US dollars today in the black market will get you N160,000 if sold at the current buying rate.

For those purchasing dollars, it will cost them N161,000. This rate of increase no doubt affects businesses, travelers, and others who need dollars and other foreign currencies for overseas transactions.

500 Dollars to Naira Today Black Market
A larger transaction of 500 US dollars will result in N800,000 at the buying rate and N805,000 at the selling rate in the black market today.

The higher volumes reflect the ongoing need for dollars in the business community.

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1,000 Dollars to Naira Today Black Market
For those who need up to 1000 US dollars, the black market will offer N1,600,000 at the buying rate and N1,610,000 at the selling rate.

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Economy

75.5% of rural Nigerians now live below poverty line — World Bank

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The World Bank has disclosed that a staggering 75.5 per cent of rural Nigerians are now living below the poverty line, reflecting deepening hardship in the country’s hinterlands.

This was revealed in the Bank’s April 2025 Poverty and Equity Brief for Nigeria, which paints a grim picture of worsening economic hardship, widening inequality, and persistent underdevelopment across much of the nation.

While poverty is widespread among urban populations, the report emphasised that the situation is significantly worse in rural areas, where economic stagnation, high inflation, and insecurity have exacerbated living conditions.

“Based on the most recent official household survey data from Nigeria’s National Bureau of Statistics, 30.9 per cent of Nigerians lived below the international extreme poverty line of $2.15 per person per day in 2018/19 before the COVID-19 pandemic,” the report stated.

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The report also highlighted Nigeria’s enduring regional disparities. “Nigeria remains spatially unequal. The poverty rate in northern geopolitical zones was 46.5 per cent in 2018/19, compared with 13.5 per cent for southern ones. Inequality measured by the Gini index was estimated at 35.1 in 2018/19.

“Nigeria’s Prosperity Gap — the average factor by which individuals’ incomes must be multiplied to attain a prosperity standard of $25 per day for all — is estimated at 10.2, higher than most peers.”

Despite successive policy interventions, these figures underscore a persistent economic divide across the country.

The report’s demographic analysis found that children aged 0 to 14 years had a poverty rate of 72.5 per cent, reflecting the scale of deprivation among the youngest segment of the population.

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Gender disparities were also observed, with 63.9 per cent of females and 63.1 per cent of males classified as poor under the $3.65 per day lower-middle-income threshold.

Education emerged as a significant determinant of poverty, with Nigerians lacking formal education experiencing a poverty rate of 79.5 per cent. This contrasts with 61.9 per cent for those with primary education and 50.0 per cent for secondary school graduates. Only 25.4 per cent of those with tertiary education were considered poor.

The report also drew attention to multidimensional poverty indicators, which further reflect widespread deprivation.

According to the World Bank, about 30.9 per cent of Nigerians live on less than $2.15 daily, 32.6 per cent lack access to limited-standard drinking water, 45.1 per cent do not have limited-standard sanitation, and 39.4 per cent have no electricity.

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Education access remains a challenge, with 17.6 per cent of adults yet to complete primary education, and 9.0 per cent of households reporting at least one school-aged child not enrolled in school.

The report noted that even before the COVID-19 pandemic, efforts to reduce extreme poverty had largely stalled.

“Before COVID-19, extreme poverty reduction had almost stagnated, dropping by only half a percentage point annually since 2010. Living standards of the urban poor are hardly improving, and jobs that would allow households to escape poverty are lacking,” the report read.

Although the World Bank acknowledged recent economic reforms aimed at stabilising Nigeria’s macroeconomic outlook, it warned that persistently high inflation continues to undermine household purchasing power, particularly in urban areas where incomes have not kept pace with rising costs.

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In light of the worsening situation, the Bank called for urgent policy action to shield vulnerable groups from inflationary shocks and to drive job creation through more productive economic activities.

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Economy

Naira Records Marginal Decline Against Dollar at Official Market

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The Nigerian naira experienced a mild drop in value on Friday, closing at ₦1,602.18 per dollar in the official foreign exchange market, based on figures released by the Central Bank of Nigeria (CBN).

This marks a decrease of ₦5.49 from the rate of ₦1,596.69 recorded on April 30, the last trading day before the May 1 Workers’ Day holiday—indicating a depreciation of approximately 0.34%.

Earlier in the week, from Monday to Wednesday, the naira remained relatively stable, exchanging at ₦1,599.95, ₦1,599.71, and ₦1,596.69 respectively.

Although the local currency showed some consistency mid-week, it wrapped up the week with a loss, following a sligh dip of 0.02% at the beginning of the week

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