The Nigerian National Petroleum Company Limited (NNPC) has discontinued the naira-for-crude swap deal, which allowed domestic refiners to purchase crude oil in local currency instead of US dollars. The move, which affects refineries including the Dangote Refinery, has sparked industry-wide concerns about rising operational costs and fuel prices.
The agreement, introduced in October 2024, was aimed at reducing Nigeria’s dependence on imported petroleum products while stabilizing the naira. However, NNPC has reportedly committed its crude production to forward contracts, making domestic supply unavailable.
The policy shift could significantly impact the Dangote Refinery, which had relied on local crude allocations under the deal. Other refineries, such as Waltersmith Petroman and BUA Refinery, are also expected to face increased costs as they shift to sourcing crude from international markets in US dollars.
Economic analysts warn that the decision may further strain Nigeria’s currency and hinder efforts to achieve self-sufficiency in petroleum production.
Source: Business Day
