Naira-for-Crude Deal Faces Uncertainty as Dangote Refinery Imports Record Quantities of Oil

The Federal Government’s naira-for-crude policy, aimed at stabilizing fuel prices and the foreign exchange market, may continue despite uncertainty over its renewal. Sources close to the deal confirmed that all parties involved— the government, Nigerian National Petroleum Company (NNPC), and Dangote Petroleum Refinery—will soon reconvene for talks. The first phase of the six-month deal expired on March 31, 2025, and while no new agreement has been reached, discussions are ongoing. The policy has had a positive impact on fuel prices and the exchange rate, which the government aims to preserve.

Since the expiration of the deal, Dangote Refinery has halted the sale of refined products in naira, creating some tension about future operations. In the first quarter of 2025, the refinery processed 400,000 barrels of crude oil per day, with 35% of the crude imported internationally, amounting to 12.6 million barrels. The refinery has diversified its feedstock by securing oil supplies from Brazil and Equatorial Guinea to address challenges with domestic availability.

Despite challenges with supply from NNPC, including an underdelivery of crude oil and the termination of NNPC’s higher stake in the refinery, Dangote’s management remains uncertain about the continuation of the naira-for-crude policy. The refinery’s executive raised concerns over the risks of conducting transactions in naira, especially with price volatility in the forex market, which has made the deal commercially less advantageous.

The Human Rights Writers Association (HURIWA) has urged President Bola Tinubu to ensure the naira-for-crude agreement continues to avoid sudden increases in fuel prices that would further burden Nigerians. The group warned that ending the deal could exacerbate the country’s ongoing economic challenges, particularly for small businesses and households already suffering from rising living costs.

Source: Punch