The Federal Government sold crude oil valued at ₦219.38 billion to the Dangote Petroleum Refinery between January and April 2025, as part of its push to support local refining and reduce dependence on fuel imports.
NNPCL delivered nine crude oil cargoes totalling 1.9 million barrels to the Dangote Refinery in Lagos, sourcing the oil from local fields and selling it at prices ranging from $74.87 to $80.34 per barrel. The transactions used exchange rates between ₦1,501 and ₦1,562 to the dollar.
Refinery Paused Naira Sales Over FX Mismatch
Despite the supply, the Dangote Refinery suspended sales in naira on March 19. The refinery explained that it was buying crude in U.S. dollars but selling fuel in naira, creating a financial mismatch.
“Our sales of petroleum products in naira have exceeded the value of naira-denominated crude received,” the company said in a statement.
This led to a spike in depot loading prices in Lagos, with petrol costs climbing above ₦900 per litre at the time.
Government Enforces Naira-for-Crude Policy
Just three weeks later, the Federal Executive Council ordered full enforcement of the naira-for-crude policy, insisting that local refineries must receive crude in naira. Officials described the policy as a long-term solution to stabilise fuel prices and reduce pressure on Nigeria’s foreign exchange reserves.
However, despite the new directive, Dangote Refinery continues to raise concerns over inadequate oil allocations, saying it still relies heavily on imported oil from the United States to sustain output.
Monthly Supply Breaks ₦100 Billion in April
Breakdown of the four-month supply shows consistent growth:
- January: ₦17.52 billion
- February: ₦32.95 billion
- March: ₦56.97 billion
- April: ₦111.95 billion
This represents a 538% increase from January to April alone.
Export Earnings Edge Higher
While supplying Dangote, the FG also earned ₦231.47 billion from crude exports to foreign buyers during the same period just slightly more than sales to the refinery.
Figures show the FG sold $153 million worth of oil externally in four months, using varying exchange rates supplied by the Central Bank of Nigeria.
IPMAN Wants Cheaper Domestic Crude
Reacting to recent fuel price hikes, the Independent Petroleum Marketers Association of Nigeria (IPMAN) urged the Federal Government to sell crude to local refineries at a discount to reduce retail petrol prices.
“This is the time to take advantage of Dangote Refinery. The government must work closely with Alhaji Aliko Dangote to make this naira-for-crude deal effective,” said IPMAN Vice President, Hammed Fashola.
He warned that unless oil prices are made affordable for local refiners, consumers will continue to pay higher pump prices.e
Crude Revenue Plunges in April
Despite robust export performance earlier in the year, April saw a sharp decline in government earnings from oil:
- Export crude receipts dropped 98%, from ₦771 billion in March to ₦15.63 billion in April.
- Domestic crude receipts also fell to zero in April.
- Total FAAC revenue dropped from ₦204.85 billion in March to ₦120.93 billion in April, a 41% decline.
Balancing Act for Energy Security
While the Dangote Refinery is expected to play a vital role in ending Nigeria’s fuel import burden, its ability to deliver cheaper fuel depends on consistent and affordable crude supply. The government must now find the right balance between foreign exchange earnings from exports and economic relief for local consumers.
As crude oil prices fluctuate globally, Nigeria’s next move could determine whether petrol becomes more affordable or even more out of reach for everyday Nigerians.
