NNPCL and Dangote Refinery in Talks to Renew Naira-for-Crude Deal
The Nigerian National Petroleum Company Limited (NNPCL) is negotiating with Dangote Petroleum Refinery to renew their naira-for-crude agreement before it expires on March 31, 2025. This follows reports claiming that NNPCL had suspended the deal until 2030 because it had already forward-sold all its crude oil. However, NNPCL clarified that the contract was originally set for six months and is now under review for renewal.
Since October 2024, Dangote Refinery has received crude oil worth about N486.31 billion under the agreement. The refinery, which has a 650,000-barrel capacity, has refined 48 million barrels since the deal began, while a total of 84 million barrels have been supplied since its launch in 2023. NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, dismissed claims that the deal had been terminated, stating that the contract remains subject to crude availability and discussions are ongoing to establish a new agreement. In a statement, he confirmed that NNPCL has supplied over 48 million barrels of crude oil to Dangote Refinery since October 2024 and more than 84 million barrels in total since the refinery started operations in 2023.
NNPCL reaffirmed its commitment to supplying crude oil to local refineries under agreed terms, ensuring a stable supply for refining in Nigeria. Zacch Adedeji, Chairman of the Technical Sub-Committee on the deal, also confirmed that the naira-for-crude policy remains in effect and was never suspended. He emphasized that the initiative helps stabilize Nigeria’s economy by improving local refining and reducing reliance on fuel imports. He stated that there has been no decision to discontinue the policy, noting that its benefits will continue strengthening the economy. Adedeji further assured that local refineries are not excluded from crude supply, and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is enforcing the Domestic Crude Oil Obligations under the Petroleum Industry Act.
Eche Idoko, Publicity Secretary of the Crude Oil Refinery-Owners Association of Nigeria, urged the government to honor its commitment to supply 27,000 barrels per day to modular refineries. He argued that the next phase of the naira-for-crude deal, after March 2025, should include all refineries, not just Dangote. While Dangote was prioritized for petrol production, he noted that modular refineries play a critical role in diesel production, which impacts food transportation costs. He emphasized that fuel prices have dropped, and the naira has strengthened against the dollar, making it essential for all local refineries to benefit from crude supply.
NNPCL’s crude supply records showed that Dangote Refinery received N486.31 billion worth of crude from October to December 2024. The transactions were valued at $373.76 million, with payments made in naira at an exchange rate advised by Afrexim Bank. However, as of last month, Dangote Refinery still owed $126.99 million (N199.96 billion) for crude already received. The crude was supplied under a 45-day credit facility, meaning payments are due within 45 days of delivery.
With negotiations ongoing, the renewal of the naira-for-crude deal is expected before March 31, 2025. The government and industry stakeholders aim to refine the agreement to ensure it benefits not only Dangote Refinery but also other local refineries in Nigeria.
