NNPCL, Dangote Refinery in Talks to Renew Naira-for-Crude Agreement

NNPCL, Dangote Refinery in Talks to Renew Naira-for-Crude Agreement

The Nigerian National Petroleum Company Limited (NNPCL) has commenced discussions with Dangote Petroleum Refinery to renew the naira-for-crude agreement as the current deal is set to expire on March 31, 2025.

In response to reports claiming that the contract had been suspended until 2030, NNPCL clarified in a statement on Monday that the agreement was originally structured for six months and remains subject to crude oil availability.

Recent findings indicate that between October and December 2024, the $20 billion Lekki-based refinery received crude oil worth approximately N486.31 billion under the deal. The initiative, which began in October 2024, was designed to enhance local supply, reduce fuel import costs, and lower pump prices.

NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, reaffirmed that since the agreement’s inception, Dangote Refinery has received 48 million barrels for refining and a total of 84 million barrels since operations began in 2023.

Similarly, Zacch Adedeji, Chairman of the Technical Sub-Committee on the Naira-for-Crude Deal, dismissed claims of contract termination, stating that the policy remains intact and continues to positively impact the economy. He emphasized that the framework ensures stable supply and optimal utilization of local refining capacity.

Additionally, the Crude Oil Refinery-Owners Association of Nigeria urged the government to honor its commitment to modular refineries, ensuring they receive the 27,000 barrels per day allocated to them.

Financial reports from NNPCL’s Federal Account Allocation Committee (FAAC) meetings revealed that crude supplied to Dangote Refinery between October and December 2024 was valued at $373.76 million, with payments made in naira based on an Afrexim Bank-advised exchange rate. However, as of February 2025, an outstanding balance of $126.99 million (N199.96 billion) remained unpaid.

The breakdown of crude allocations showed fluctuations in supply, with the highest volume of 598,125 barrels delivered on October 14, 2024, and the lowest at 5,000 barrels on October 30, 2024. Transactions continued in November and December, with total crude shipments reaching 2.1 million barrels in October and decreasing in subsequent months.

The NNPCL reaffirmed its commitment to supporting domestic refining and ensuring efficient execution of the naira-for-crude policy to enhance fuel supply stability and reduce foreign exchange dependence.