Breaking News: NNPC stops Naira for Crude Sales
The Nigerian National Petroleum Company (NNPC) Limited has discontinued the naira-for-crude deal with Dangote Petroleum Refinery and other local refineries, TheCable understands.
The development could trigger an uptick in the pump price of petrol as local refineries — including Dangote — will now rely on international suppliers for feedstock, gulping huge costs in dollars.
The NNPC reportedly told the refineries it has forward-sold all its crude, although production is now said to be higher than when the deal commenced.
Nigeria officially commenced the sale of crude oil and refined petroleum products in naira to local refineries on October 1, 2024.
The move was meant to improve supply, save the country millions of dollars in petroleum products imports, and ultimately reduce pump prices.
However, multiple sources said the initiative will be suspended until 2030.
A high-level source confirmed that the NNPC has notified Dangote Petroleum Refinery and other local refiners that it will no longer provide crude oil to them, as it has forward-sold all of its crude supplies until 2030.
Despite recent attempts to bolster domestic refining capacity, the country has spent “over $4.3 billion importing 6.38 billion litres of premium motor spirit (petrol) and automotive gas oil (diesel) in just five months”, industry sources said.
The NNPC is said to be among the entities still importing products, an act backed by the recent deregulation of the downstream sector.
Another source said at a time when Nigerians are hoping for further price reductions, “the NNPC unilaterally decided to end the naira-for-crude initiative”.
TheCable has contacted the NNPC for comments.
While the Dangote refinery has declined to comment on the NNPC’s recent move, an official said the company will carefully assess its options and decide on the appropriate course of action.
The decision to stop the naira-based crude supply might lead to volatility in the foreign exchange (FX) market, thereby eroding recent gains, according to market analysts.
THE TROUBLED CRUDE-FOR-NAIRA DEAL
In October 2024, the federal executive council (FEC) approved the allocation of 450,000 barrels of crude intended for domestic consumption to be sold in naira to Nigerian refineries, with the Dangote refinery serving as a pilot project.
Under the scheme, the NNPC was expected to supply 385,000 barrels per day of crude oil to the Lekki-based refinery.
However, the national oil firm has been accused of consistently failing to meet the allocation.
In November 2024, the refinery said the crude-for-naira initiative was faltering, as it was still unable to secure adequate supplies.
“We need 650,000 barrels per day, (state oil firm NNPC Ltd) agreed to give a minimum of 385,000 bpd but they are not even delivering that,” Edwin Devakumar, the vice-president of Dangote Industries Limited (DIL) had said.
He further described the NNPC’s supply as “peanuts”.
