The Federal Government’s Technical Sub-Committee on the Naira-for-Crude Policy will reconvene on Monday, March 25, 2025, to find solutions to the challenges affecting the agreement between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Petroleum Refinery.
The meeting follows the temporary suspension of Dangote Refinery’s sale of petroleum products in naira, citing difficulties in crude oil procurement. Insiders revealed that NNPCL’s large crude allocations to foreign creditors have made it hard to supply local refiners, including Dangote, leading to disruptions in the naira-for-crude deal.
NNPCL Struggles with Crude Supply
A senior official familiar with the situation explained that while the naira-for-crude scheme is not permanently scrapped, NNPCL’s commitment to foreign creditors has made it difficult to supply local refiners with crude.
“From all indications, the scheme won’t end. The sticking point is the issue of crude availability, with NNPC claiming it has pre-sold large volumes of crude,” the official said.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has been tasked with presenting alternative solutions, which the panel will review during Monday’s meeting.
Last week, a high-level meeting at the Ministry of Finance Headquarters in Abuja was held to assess the crisis. Key officials, including Finance Minister Wale Edun, FIRS Chairman Zacch Adedeji, NNPC’s Chief Financial Officer, and representatives from the Central Bank of Nigeria (CBN), NUPRC, and Dangote Refinery, were in attendance.
Dangote Refinery Suspends Naira Sales
On Wednesday, March 20, Dangote Refinery announced that it had temporarily halted the sale of petroleum products in naira, citing difficulties in crude supply.
Dangote Refinery stated, “To date, our sales of petroleum products in naira have exceeded the value of naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency.”
Following this announcement, the cost of loading petrol at private depots in Lagos surged from N850 to about N900 per litre, raising concerns about fuel price stability.
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Marketers Seek Alternatives
Petroleum product marketers have begun exploring other options if Dangote Refinery insists on selling fuel in dollars.
Billy Gillis-Harry, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), said the market is opreparing for surprises and possible fuel price increases.
He said, “The market is making preparations for any surprises. If there are surprises, we’ll have alternatives to go to.”
Gillis-Harry urged the government and Dangote Refinery to resolve their issues quickly, warning against a return to fuel scarcity.
“We do hope that all of this will be resolved soon. The masses cannot go back to the days of fuel scarcity,” he said.
Call for More Refining Options
Marketers emphasized the need for multiple sources of petroleum supply to prevent future crises.
Gillis-Harry said, “We will make sure that we have different sources of petroleum products. If one source is creating difficulty, then we have to look at other sources. NNPC, local refineries, and importation are all on the table.”
He also mentioned Azikel Refinery in Bayelsa, which is upgrading to produce 25,000 metric tonnes per day, as a potential alternative.
Government Urged to Sustain Naira-for-Crude Policy
The Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, urged the Federal Government to continue supplying crude to Dangote Refinery in naira to stabilize the market.
“The masses today are happy with the drop in petrol prices. But just a few hours after Dangote’s announcement, depot owners started increasing prices,” he said.
Fashola revealed that fuel prices rose from N825 per litre on Tuesday to N836 per litre by Wednesday afternoon, warning that further increases would hurt Nigerians.
“I appeal to the FG to continue supplying crude to Dangote and other local refiners to maintain stability in the sector,” he said.
NNPCL’s Position
The NNPCL has neither confirmed nor denied Dangote’s claim that it had been forced to buy crude in dollars. However, NNPC’s spokesperson, Olufemi Soneye, reiterated the company’s commitment to supplying crude for local refining based on agreed terms.
“As I have repeatedly stated, NNPC remains committed to supplying crude for local refining based on mutually agreed terms and conditions,” he said.
He also pointed out that all local refiners collectively produce less than 50% of Nigeria’s national consumption, meaning importation still plays a major role in fuel supply.