The Nigerian National Petroleum Company Limited (NNPCL) earned ₦336.37bn from crude oil sales in the first quarter of 2025, with the Dangote Petroleum Refinery accounting for over 32% of the transaction value.
Internal records submitted by NNPCL at the Federation Account Allocation Committee (FAAC) meetings show that crude oil supplies to Dangote Refinery totalled ₦107.44bn between January and March 2025. The crude was priced between $74.87 and $80.34 per barrel, using naira-dollar exchange rates ranging from ₦1,501.22/$ to ₦1,562.91/$ figures endorsed by the African Export-Import Bank (Afreximbank).
The sales were executed under the Federal Government’s “naira-for-crude” initiative, introduced in October 2024, to stabilise domestic supply, strengthen the naira, and reduce petroleum import costs.
“The Dangote domestic lifting is payable in naira based on Afrexim Bank advised exchange rate,” one of the documents stated.
A Shift Towards Local Refining
Following an executive directive in July 2024, NNPCL began selling crude in naira to local refineries under a six-month pilot. The policy, targeting 650,000 barrels-per-day refining capacity at the Dangote Refinery, was meant to cushion dollar demand and ease petroleum product pricing.
However, the refinery halted naira-based purchases in March, citing a mismatch between sales proceeds and dollar-denominated crude obligations. After a brief suspension, the Federal Executive Council reaffirmed its commitment, declaring the policy a permanent fixture of Nigeria’s energy transition.
Since its reinstatement, Dangote Refinery has lowered petrol prices three times, the latest reducing ex-depot rates by 3.5% to ₦835 per litre.
Supply Volumes and Cargo Details
Seven cargoes, totalling 915,821 barrels, were delivered to Dangote Refinery from the Okwuibome field, operated by Sterling Oil Exploration & Energy Production Company (SEEPCO) under a Production Sharing Contract. The shipments occurred aboard vessels such as Gulf Loyalty, Almi Voyager, and Sonangol Kalandula, with due dates spanning 16 January to 22 March 2025.
One of the largest transactions involved 300,000 barrels priced at $75.89 each, generating $22.77m or ₦34.18bn. Another two cargoes aboard Gulf Loyalty yielded ₦17.52bn from 149,737 barrels in December 2024.
In total, the 915,821 barrels sold to Dangote Refinery amounted to $70.54m in forex and ₦107.44bn in naira.
Labour Disputes Cloud SEEPCO Operations
While SEEPCO remains a key crude supplier, its operations have come under regulatory and labour scrutiny. The Nigerian Content Development and Monitoring Board (NCDMB) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) accused the company of expatriate quota abuse and anti-labour practices.
PENGASSAN President, Festus Osifo, led protests at SEEPCO’s Lagos office, alleging discrimination against qualified Nigerians. The NCDMB confirmed ongoing investigations and warned that non-compliance with the Nigerian Oil and Gas Industry Content Development (NOGICD) Act would attract sanctions.
SEEPCO had previously been penalised and reportedly attempted out-of-court remediation in 2020, including training 40 Nigerians in 2022, though job commitments remain unfulfilled.
Foreign Sales Generate ₦229bn
Beyond domestic supply, NNPCL earned ₦228.93bn from crude exports totalling 1.95 million barrels to foreign refiners in Q1 2025. These transactions involved Egina, Erha, and Forcados Blend crude lifted under PSC arrangements by operators including Total (TUPNI), ExxonMobil (ESSO), and Pan Ocean.
Key sales included:
- 990,158 barrels of Egina crude lifted aboard Apache, worth $78.15m (₦120.04bn at ₦1,535.82/$)
- 550,501 barrels of Erha crude aboard Aquafreedom, generating $41.23m (₦61.50bn)
- 400,000 barrels of Egina crude aboard Baghdad, valued at $31.13m (₦45.99bn)
- 12,000 barrels of Forcados Blend aboard Almi Voyager, yielding ₦1.41bn
The exchange rates used in these foreign sales, set by the Central Bank of Nigeria, ranged between ₦1,477.22/$ and ₦1,535.82/$ lower than rates applied to Dangote’s domestic liftings.
Currency Disparity and Policy Refinement
The discrepancy in rates underscores ongoing currency volatility and challenges NNPCL’s balancing act between maximising forex inflow and ensuring domestic fuel stability.
A technical subcommittee comprising the Ministry of Finance, NNPCL, and Dangote Refinery has been established to refine pricing models and address liquidity issues. Stakeholders are also reviewing long-term naira-for-crude contract terms to align with Nigeria’s fuel self-sufficiency goals.
The policy is widely seen as crucial to the Federal Government’s ambition to eliminate petrol imports, conserve forex, and strengthen local refining under its “Decade of Gas” strategy.
