According to the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, the Corporation has signed term sheets with Dangote Group to purchase a 20% stake in the company’s oil refinery in Lagos state, which is nearing completion.

Although the NNPC will require cabinet permission to move forward with the idea, Kyari believes the benefit of owning a stake in Africa’s largest oil refinery is worth the price. He wouldn’t say how much the stake is worth, but he did say the refinery is worth $19 billion.

He said NNPC is talking with banks to borrow money to buy a stake in the 650,000 barrel per day (bpd) refinery. Gasoline price limitations have limited NNPC’s financial flow, making it the sole importer of the fuel and forcing it to sell at a loss.

Kyari claimed that he had told the government that NNPC’s remittances to the government may drop to zero because of the costs, but this is yet to happen. Several Nigerian unions have rejected any oil price hikes, but the GMD expressed optimism that a deal to eliminate subsidy would be reached in the coming months.

“The reality is that we can’t afford it but if you don’t do something smart, you could end up with prices that Nigerians can’t afford,” he stated.

The NNPC and three other companies have approached Dangote Group about buying a stake, according to a Dangote Group’s prior statement.