By Energy Worth Online
There are indications that the naira-for-crude policy of the Federal Government may continue, as impeccable insider sources familiar with the development insisted on Monday that all parties involved in the deal would reconvene soon.
The first phase of the six-month deal involving the Federal Government, Nigerian National Petroleum Company Limited, and Dangote Petroleum Refinery ended March 31, 2025.
It has not been renewed, and the Dangote refinery has since stopped selling refined petroleum products in naira due to the non-renewal of the naira-for-crude deal.
This came as a report by S&P Global on Monday stated that the Dangote refinery processed approximately 400,000 barrels per day of crude oil in 2025 so far, with about 35 per cent of this supply being sourced from international imports.
This means the plant imported about 140,000 barrels of crude oil per day and a total of 12.6 million barrels in three months.
Commenting on the naira-for-crude policy, a senior government official familiar with the workings of the committee responsible for the deal told one of our correspondents that the government has not ruled out the policy.
“The initiative is going to continue because it is now obvious that the policy has a great impact on not just fuel prices, but also on other economic indices. It also positively impacted the FX rate.
“However, the committee is awaiting the Nigeria Upstream Petroleum Regulatory Commission’s submission on the task given to it as regards the policy. Once that is done, the next thing should be the way forward as regards the naira-for-crude policy,” the source, who spoke to one of our correspondents in confidence due to the lack of authorisation to speak on the matter, stated.
Recall that on October 1, 2024, the government commenced the sales of crude oil in naira to the Dangote refinery to improve supply, save the country millions of dollars in petroleum product imports, and ultimately reduce the pump prices of fuel.
NNPC recently stated that the Dangote refinery had received 48 million barrels of crude oil in naira under the deal. It also said a total of 84 million barrels of crude had been supplied to the refinery since it commenced operations in 2023.
NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, in a statement, explained that the initial deal was for six months and that discussions for the renewal of the agreement were currently ongoing, with the aim of establishing a new contract.
Meanwhile, the S&P report also revealed that the Dangote refinery had secured its first crude oil from Brazil and Equatorial Guinea, according to a company executive, as volatile domestic availability had added incentive to diversify its feedstock.
According to S&P Global Commodities at Sea data, Brazil’s Petrobras shipped the first cargo of Brazil’s Tupi crude to the refinery on March 26, delivering one million barrels of the medium sweet grade.
Supplies from Equatorial Guinea are yet to be dispatched, according to the ship tracking data, but will soon add to the growing list of crude grades being processed at the plant.
“We have started sourcing globally,” a refinery executive told S&P Global Commodity Insights. The official also confirmed that the company now counts Brazil and Equatorial Guinea among its global oil suppliers.
“Dangote has received roughly 400,000 b/d of crude oil in 2025 to date, of which around 35 per cent was imported internationally,” the S&P report stated, quoting data obtained from the CAS data.
Last year, the Dangote Chairman, Aliko Dangote, shared plans to run Brazilian crude at the plant back in July 2024 and said talks were underway with Senegal and Libya over potential supply routes.
However, as the refinery’s main trade partner and minority stakeholder, NNPC, has faced its challenges, the company could have new incentives to forge alternative supply links. Since the refinery began operating, NNPC has consistently underdelivered on supplies for Dangote.
After delivering around a third of some 300,000 b/d of discounted oil it had initially promised to the refinery, according to CAS data, the national oil company reduced its stake in the project from 20 per cent to 7.2 per cent in July.
In October, it agreed to begin supplying crude to Dangote in naira as part of an initiative to deflate Nigerian fuel prices and briefly became its sole supplier.
However, according to NNPC figures, the NOC delivered roughly 280,000 b/d of crude to Dangote in naira by March 10, falling shy of the 385,000 b/d agreed under the deal. The six-month deal officially ended on Monday, March 31, 2024.
Reacting, a Dangote executive who spoke to S&P Global expressed significant uncertainty regarding the future of a new naira-for-crude deal, stating, “We are not even certain if it will be renewed or if it will proceed at all.”
Besides challenges for NNPC, he argued that the obligation for Dangote to sell its oil products in naira under the deal had become a drag on its operations. He said that the refinery was left exposed to price fluctuations by pegging contract prices to dollar-based benchmarks and converting them into naira at the point of sale.
“It’s not commercially advantageous for us,” said the source. “When we buy in naira and sell in naira, the forex risk between the time of buying crude and selling the products may not be fully covered”.
According to trade sources and Nigerian port authorities, NNPC has allocated seven crude oil cargoes to deliver around 245,000 b/d to the Dangote site in April but has yet to agree on payment terms.
