Lagos, Nigeria – The future of the naira-for-crude deal involving the Nigerian government, the Nigerian National Petroleum Company Limited (NNPC), and Dangote Petroleum Refinery hangs in the balance as discussions for renewal loom. Sources close to the matter revealed Monday that all stakeholders would soon meet to discuss the continuation of the deal, which ended on March 31, 2025.
The agreement saw crude oil sold to the Dangote refinery in naira, aiming to bolster supply, save foreign exchange, and lower petrol prices. However, since the deal lapsed, the refinery has halted sales of refined products in naira, raising concerns among industry experts and consumers alike.
According to S&P Global’s report published on the same day, the Dangote refinery has processed about 400,000 barrels of crude per day so far this year, with roughly 35% sourced from international markets. This translates to an average of 12.6 million barrels imported within the first quarter of 2025 alone.
A senior government official, who preferred to remain anonymous, stated, “The naira-for-crude initiative is likely to continue because it has significantly impacted fuel prices and the economic landscape, including foreign exchange rates.” The official added that the committee is awaiting a report from the Nigeria Upstream Petroleum Regulatory Commission before any future decisions are made.
Initially launched on October 1, 2024, the naira-for-crude deal was set to improve local product supply and curb the high costs of fuel imports. NNPC disclosed that 48 million barrels of crude oil were supplied to the Dangote refinery under this arrangement, part of a broader plan to stabilize price fluctuations in the local market.
Olufemi Soneye, NNPC’s Chief Corporate Communications Officer, confirmed that discussions for a new deal were ongoing and expressed optimism for a successful renewal. “We are actively working toward finalizing a new agreement that reflects current market conditions,” Soneye stated.
Meanwhile, the refinery has diversified its crude supply chain by sourcing oil from international partners, including Brazil and Equatorial Guinea. A company executive shared that, “We have started sourcing globally,” emphasizing the need to mitigate supply chain disruptions.
Despite these efforts, uncertainties linger regarding the renewal of the naira-for-crude deal. A Dangote executive voiced concerns, stating, “There’s no assurance that the deal will proceed, and the current reliance on naira trading has become challenging for our operations,” referring to the adverse effects of fluctuating foreign exchange rates.
Reports indicate that NNPC plans to deliver approximately 245,000 barrels per day to the Dangote site in April; however, payment terms remain unresolved, further threatening the refinery’s operations.
In response to potential fallout from the stalled deal, the Human Rights Writers Association (HURIWA) has called upon President Bola Tinubu to facilitate the agreement’s renewal. HURIWA’s National Coordinator, Emmanuel Onwubiko, warned that failing to maintain the deal would likely lead to a spike in fuel prices, exacerbating socioeconomic challenges for Nigerians.
“A sudden change in this agreement could mean severe hardship for millions already struggling with financial pressures,” Onwubiko cautioned, highlighting the economic ramifications for small businesses dependent on affordable petrol. He urged the government to act swiftly in reaching a resolution in line with the nation’s economic interests.
With the nation’s economy teetering, the outcome of the naira-for-crude negotiations will significantly impact millions of Nigerians dependent on stable fuel prices and supply.
