The Crude Oil Refinery-owners Association of Nigeria (CORAN) has confirmed the conclusion of the Federal Government’s Naira-for-Crude initiative, which was aimed at supporting local refineries by supplying crude oil in naira rather than dollars.
CORAN’s National Publicity Secretary, Eche Idoko, clarified that the arrangement was not abruptly terminated by the Nigerian National Petroleum Company Limited (NNPCL) but had reached the end of its first phase, which was scheduled to conclude in March.
“The Naira-for-Crude agreement was supposed to end in March as the first phase, and it has ended,” Idoko stated. “We are yet to get the government’s renewal. The original agreement was that after the pilot phase, an assessment would be conducted to determine its impact before a renewal. However, we have not received any communication on that.”
The initiative, approved by the Federal Executive Council (FEC) last year, was intended to stabilize fuel pump prices and ease pressure on the naira-dollar exchange rate. Under the plan, local refineries were to receive 450,000 barrels of crude oil per day, with the Dangote Refinery allocated 385,000 barrels per day (12 million barrels per month).
However, implementation was inconsistent, leading to supply shortages that hampered refinery operations. Documents indicate that in February 2025, Dangote Refinery received only 61,290 barrels per day under the arrangement, totaling 6.5 million barrels for the month—far below the agreed allocation. The supply was further reduced to 4.75 million barrels in March.
The inconsistent supply has forced refiners to seek crude from alternative sources, further complicating Nigeria’s reliance on fuel imports despite increased domestic crude production. In its bid to optimize full capacity, the 650,000 barrels-per-day Dangote Refinery has resorted to importing crude from the United States.
Data compiled by Bloomberg reveals that Nigeria imported 47,000 barrels per day of U.S. West Texas Intermediate (WTI) crude in 2024, with a substantial share going to Dangote Refinery. In December 2024 alone, Dangote received shipments amounting to 358,000 barrels per day.
This development highlights Nigeria’s vulnerability to global oil market fluctuations, raising concerns about the country’s energy security and the effectiveness of policies aimed at strengthening local refining capacity. The fate of the Naira-for-Crude initiative remains uncertain as stakeholders await the government’s decision on its possible renewal.
