The Nigerian National Petroleum Company Limited (NNPC) has signed a fresh two-year crude oil supply agreement with the Dangote Petroleum Refinery, securing feedstock for the 650,000-barrel-per-day plant in Lekki, Lagos.
The deal, sealed in August, extends the crude-for-naira framework introduced by the Federal Government to prioritise local refining. Records show that from October 2024 to date, 82 million barrels of crude have gone to Dangote Refinery, with 60 percent (49.3 million barrels) paid for in naira.
Crude-for-Naira Deal Extended
Dangote Refinery recently suspended petrol sales in naira after exhausting its allocation. The move triggered concerns of market disruption, but the Naira-for-Crude Technical Committee, chaired by Federal Inland Revenue Service chief Zacch Adedeji, intervened. Within hours, the refinery resumed sales.
NNPC spokesperson Andy Odeh confirmed the continuation of the programme in a statement, stressing that crude allocation to the refinery remains steady.
“In line with the FGN Crude for Naira Initiative, NNPC Limited continues to allocate crude to Dangote Refinery in naira for the sale of products in the domestic market,” Odeh said.
Odeh explained that NNPC, the refinery, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) periodically reconcile crude volumes to match refined products sold locally. He added that NNPC allocated three naira crude cargoes in August and five each for September and October. August loadings have been completed, while September operations are underway with two vessels at terminals for pre-loading checks.
FG Reaffirms Energy Security
The Steering Committee of the Domestic Crude Oil and Refined Products Sales in Local Currency Initiative, led by Finance Minister and Coordinating Minister of the Economy Wale Edun, reaffirmed government support for the programme.
At a weekend meeting attended by Budget Minister Atiku Bagudu, FIRS Chairman Zacch Adedeji, representatives of NMDPRA, the Central Bank of Nigeria, Afreximbank, NNPC, and Dangote Refinery, the committee pledged to safeguard stability.
“The crude-for-naira initiative will continue. There will be no disruption in the nationwide supply of refined products. The Federal Government remains fully committed to energy security, consumer protection, and price stability,” said Finance Ministry spokesperson Mohammed Manga.
President Bola Tinubu ordered the scheme last year to address crude shortages at Dangote Refinery and shield Nigerians from fuel price volatility. Although Aliko Dangote praised the policy for reducing feedstock costs, he repeatedly flagged limited allocations, which forced the refinery to import U.S. crude.
Industry Reactions and the Road Ahead
Oil marketers welcomed the new pact, calling it a critical step for fuel stability.
Independent Petroleum Marketers Association of Nigeria (IPMAN) Vice President Hammed Fashola said, “This is a good development. Everyone saw the impact when the programme began. Renewing it will restore stability, and that is what the system needs.”
IPMAN spokesperson Chinedu Ukadike echoed this view but urged the government to include modular refineries.
“NNPC should keep supplying Dangote crude oil. Exporting while he imports makes no sense. With consistent supply, filling stations will get products and Nigerians will not suffer,” Ukadike said.
He also called on the Federal Government to issue a white paper to resolve Dangote Refinery’s labour dispute with the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), warning that continued tensions could destabilise the economy.
With the new deal in place, Dangote Refinery is set to receive more reliable local crude supplies, reducing dependence on imports and reinforcing the government’s energy security drive. For consumers, it signals greater stability in fuel availability and prices, although challenges remain regarding crude volumes and labor disputes.
