The Nigerian National Petroleum Company (NNPC) Limited has ended its naira-for-crude arrangement with Dangote Petroleum Refinery and other local refineries, a move that could drive up petrol prices as these refineries turn to costlier international crude suppliers.
Sources indicate that the NNPC has forward-sold all its crude, despite increased production levels. This decision suspends the naira-based crude initiative until 2030, disrupting efforts to cut fuel import costs and stabilize pump prices.
Nigeria introduced the naira-for-crude policy in October 2024, aiming to boost domestic refining and reduce dependence on dollar-based fuel imports. However, the NNPC has now informed local refiners, including Dangote, that it will no longer supply crude to them under this scheme.
The development comes as Nigeria continues to spend heavily on fuel imports, with over $4.3 billion spent on 6.38 billion liters of petrol and diesel in just five months. Despite deregulation, the NNPC remains a key importer, raising concerns about price stability.
The Dangote refinery has not officially commented on the NNPC’s move, but an insider hinted at a careful review of its options. Analysts warn that the decision could trigger forex market volatility and weaken recent gains.
The naira-for-crude deal was approved by the federal executive council in October 2024, with the NNPC mandated to supply 385,000 barrels per day to Dangote’s Lekki-based refinery. However, industry officials had long criticized the NNPC for failing to meet its commitments, with Dangote executives calling the supplies inadequate.
