The Nigerian National Petroleum Company (NNPC) Limited has reportedly discontinued the naira-for-crude deal with Dangote Petroleum Refinery and other local refineries.
TheCable, a local newspaper, reported that sources familiar with the matter confirmed that the national oil company suspended the supply programme to all local refineries in Nigeria.
A high-level source confirmed that the NNPC has notified Dangote Petroleum Refinery and other local refiners that it will no longer provide crude oil to them, as it has forward-sold all of its crude supplies until 2030.
However, the current output is apparently higher than when the deal commenced.
Despite recent attempts to bolster domestic refining capacity, the country has spent industry sources stated that:.
“over $4.3 billion importing 6.38 billion liters of premium motor spirit (petrol) and automotive gas oil (diesel) in just five months,”
On October 1, 2024, Nigeria formally started selling crude oil and processed petroleum products to nearby refineries in naira.
The goal of the action was to increase supply, prevent the nation from importing petroleum products worth millions of dollars, and eventually lower pump costs.
However, multiple sources said the initiative will be suspended until 2030.
Meanwhile, the NNPC Limited earlier refuted allegations in February 2025 that it imported over 200 million liters of Premium Motor Spirit (PMS), commonly known as petrol despite recent refinery operations in the country.
Another source said that at a time when Nigerians are hoping for further price reductions, “the NNPC unilaterally decided to end the naira-for-crude initiative.” TheCable has contacted the NNPC for comments.
While the Dangote refinery has declined to comment on the NNPC’s recent move, an official said the company will carefully assess its options and decide on the appropriate course of action.
The decision to stop the naira-based crude supply might lead to volatility in the foreign exchange (FX) market, thereby eroding recent gains, according to market analysts.
Since domestic refineries, like Dangote, would now depend on foreign suppliers for feedstock, incurring significant expenditures in dollars, this move may result in an increase in the price of gasoline at the pump.
What you need to know
The Federal Executive Council (FEC) authorized in October 2024 the distribution of 450,000 barrels of domestically consumed crude to Nigerian refineries for sale in naira, with the Dangote plant acting as a test project.
The Lekki-based refinery was supposed to receive 385,000 barrels of crude oil per day from the NNPC as part of the plan.
However, the national oil firm has been accused of consistently failing to meet the allocation.
In November 2024, the refinery said the crude-for-naira initiative was faltering, as it was still unable to secure adequate supplies.
Edwin Devakumar, the vice president of Dangote Industries Limited (DIL), commented on the supply from the oil company as some point as peanuts adding:
“We need 650,000 barrels per day. (State oil firm NNPC Ltd.) agreed to give a minimum of 385,000 bpd, but they are not even delivering that.”
