The Nigerian National Petroleum Company Limited and Dangote Petroleum Refinery are actively negotiating a new naira-for-crude agreement, as the current six-month contract is set to expire on March 31, 2025.
This arrangement allows NNPCL to supply crude oil to Dangote Refinery in exchange for payment in naira, aiming to bolster domestic refining and reduce reliance on imported petroleum products.
This was disclosed in a statement by the Chief Corporate Communications Officer, Olufemi Soneye on Monday following claims that the national oil company had suspended the naira-for-crude deal until 2030, as it has forward-sold all its crude oil.
Soneye added that since the naira-for-crude deal began in October 2024, the 650,000-barrel-per-day refinery has received 48 million barrels for refining into petroleum products.
He also clarified that the deal was based on crude oil availability.
The statement read, “NNPC Limited has noted recent reports circulating on social media regarding the alleged unilateral termination of the crude oil sales agreement in naira between NNPC and Dangote Refinery.
“To clarify, the contract for the sale of crude oil in naira was structured as a six-month agreement, subject to availability, and expires at the end of March 2025. Discussions are currently ongoing towards emplacing a new contract.
“Under this arrangement, NNPC has made over 48 million barrels of crude oil available to Dangote Refinery since October 2024. In aggregate, NNPC has made over 84 million barrels of crude oil available to the refinery since its commencement of operations in 2023.
“The national oil firm further reaffirmed its commitment to supplying crude oil for local refining based on mutually agreed terms and conditions.”
Similarly, the Chairman of the Technical Sub-Committee on the naira-for-crude deal, Zacch Adedeji, reaffirmed the government’s commitment, stating that terminating the contract was never considered.
Adedeji emphasized that there is strong evidence supporting the policy as the right approach and assured that it will continue to benefit the nation’s economy.
“The policy framework enabling the sale of crude oil in naira for domestic refining remains in force. The initiative was designed to ensure supply stability and optimize the utilisation of local refining capacity. There has been no decision at the policy level to discontinue this approach, nor is it being considered. After implementing the policy for some months, evidence abounds that it is the right way to go, and it will continue to help the economy.
“The framework for domestic crude transactions is designed to promote a competitive and efficient pricing environment,” he said in an e-signed statement.
The Federal Inland Revenue Chairman also stated that local refineries have not been excluded from domestic crude supply, adding that the Nigerian Upstream Petroleum Regulatory Commission is actively enforcing compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.
“The engagement process for crude oil supply to domestic refineries therefore remains in place by structured agreements, balancing factors such as availability, demand, and market conditions. There is no exclusion of local refineries from access to domestic crude oil. The Nigerian Upstream Petroleum Regulatory Commission is actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.
“We remain committed to ensuring the efficient execution of this initiative in line with its core objectives – enhancing local refining, reducing foreign exchange exposure, and stabilising the domestic fuel supply,” he concluded.
On October 1, 2024, the government began selling crude oil in naira to local refineries to enhance supply, save millions of dollars on petroleum product imports, and ultimately lower pump prices.
This was revealed in a statement by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.
“The Hon. Minister of Finance and Coordinating Minister of the Economy announced that, in line with the Federal Executive Council (FEC) directive, the sale of crude oil and refined petroleum products in Naira has officially commenced as of October 1st, 2024.
“Following a meeting of the Implementation Committee, chaired by the Hon. Minister of Finance and Coordinating Minister of the Economy on October 3rd, 2024, to conduct a post-commencement review of the Crude Oil and Refined Products Sales in Naira initiative, the commencement of this strategic initiative was affirmed by key stakeholders,” the statement read.
It was previously reported that Dangote Refinery had accused International Oil Companies in Nigeria of actively trying to undermine the Dangote Oil Refinery and Petrochemicals.
