The six-month naira-for-crude deal between the Nigerian government, NNPC, and Dangote Petroleum Refinery officially ended on March 31, 2025, without immediate renewal. Under this innovative policy, which began on October 1, 2024, the government sold crude oil in naira to the Dangote refinery to improve domestic supply, save foreign exchange on petroleum product imports, and ultimately reduce fuel prices for Nigerian consumers.
A senior government official familiar with the policy committee’s work indicated that discussions for continuing the policy are ongoing, stating: “The initiative is going to continue because it is now obvious that the policy has a great impact on not just fuel prices, but also on other economic indices. It also positively impacted the FX rate.” The official noted that the committee is awaiting the Nigeria Upstream Petroleum Regulatory Commission’s submission before determining the next steps.
According to NNPC, Dangote received 48 million barrels of crude oil in naira under the original deal, out of a total of 84 million barrels supplied to the refinery since it commenced operations in 2023. However, NNPC figures indicate they delivered approximately 280,000 barrels per day to Dangote by March 10, falling short of the 385,000 barrels per day agreed under the arrangement.
A Dangote executive expressed uncertainty regarding a potential renewal, telling S&P Global, “We are not even certain if it will be renewed or if it will proceed at all.” The executive argued that the obligation to sell oil products in naira under the deal had created financial challenges for the refinery, which was exposed to currency fluctuations between purchasing crude and selling refined products.
The Human Rights Writers Association has urged President Bola Tinubu to ensure the deal continues, warning that termination could lead to sudden fuel price increases and worsen economic hardship for millions of Nigerians already facing multiple economic challenges.
Source: Punch Ng
