The Nigerian National Petroleum Company Limited (NNPCL) has started discussions with the Dangote Petroleum Refinery to renew the naira-for-crude agreement before it expires on March 31, 2025. The state owned oil firm clarified this in response to claims that it had suspended the deal until 2030 due to forward selling all its crude oil.
Findings show that between October and December 2024, the Dangote refinery receives crude oil worth about N486.31 billion under this agreement. The government introduced the naira-for-crude policy on October 1, 2024, to improve local supply, reduce import costs and lower fuel prices.
NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, confirmed that the initial deal was for six months and is now being reviewed for renewal. Since October 2024, the 650,000-barrel-capacity refinery has received 48 million barrels, while a total of 84 million barrels have been supplied since its launch in 2023. He also emphasized that the agreement depends on crude availability.
In an official statement, NNPCL dismissed reports of a unilateral termination, stating that discussions are ongoing to establish a new contract. The company reaffirmed its commitment to supplying crude oil to local refineries under mutually agreed terms.
Zacch Adedeji, Chairman of the Technical Sub-Committee on the naira-for-crude policy, also confirmed that the agreement remains in place. He noted that the policy has improved supply stability and optimized domestic refining. He added that there is no plan to discontinue the initiative, as it benefits the economy and strengthens the naira.
The Federal Inland Revenue Chairman also assured that local refineries have not been excluded from domestic crude supply. The Nigerian Upstream Petroleum Regulatory Commission is actively monitoring compliance with the Domestic Crude Oil Obligations under the Petroleum Industry Act.
Meanwhile, the Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria, Eche Idoko, stressed the need for the government to honor its promise of supplying 27,000 barrels per day to modular refineries. He noted that the first phase of the policy started with Dangote because it was the only refinery capable of producing petrol at the time. However, he emphasized that other refineries, especially those producing diesel, should now be included.
An analysis of crude oil transactions from NNPCL’s reports at the Federal Account Allocation Committee (FAAC) meetings revealed that Dangote refinery receives crude worth N486.31 billion. These transactions were valued at $373.76 million and were paid for in naira at an exchange rate advised by Afrexim Bank. As of last month, outstanding payments of $126.99 million (N199.96 billion) were yet to be settled.