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Petrol Price Surge Imminent As NNPC Halts Naira-For-Crude Deal with Local Refineries
The Nigerian National Petroleum Company (NNPC) Limited has reportedly halted the naira-for-crude arrangement with Dangote Petroleum Refinery and other local refineries, a move that could lead to an increase in petrol prices.
understands that with the suspension of the deal, local refineries, including Dangote, will now have to source crude oil from international suppliers, which will significantly raise costs due to dollar-denominated transactions.....KINDLY READ THE FULL STORY HERE▶
According to TheCable, sources indicate that the NNPC has informed refiners that all its crude has been forward-sold, despite an increase in production since the agreement began.
The sale of crude oil in naira to Nigerian refineries was officially launched on October 1, 2024, with the aim of boosting domestic supply, reducing import costs, and ultimately lowering fuel prices.
However, reports suggest that the initiative has now been put on hold until 2030.
A high-ranking industry source confirmed that the NNPC has communicated to Dangote Petroleum Refinery and other local refiners that it will no longer supply them with crude oil due to prior sales commitments extending to 2030.
Despite recent efforts to enhance local refining, Nigeria has spent over $4.3 billion importing 6.38 billion litres of petrol and diesel within five months, according to industry insiders.
The NNPC remains a key importer of petroleum products, a role justified by the recent deregulation of the downstream sector. However, concerns have emerged over the sudden termination of the naira-for-crude initiative.
An industry source noted that “at a time when Nigerians are hoping for further price reductions, the NNPC unilaterally decided to end the naira-for-crude initiative.”
While the NNPC has yet to officially respond, Dangote Petroleum Refinery has also refrained from commenting on the matter. However, an official stated that the company is currently evaluating its options before deciding on its next course of action.
Analysts warn that discontinuing the naira-based crude supply could destabilize the foreign exchange market and undo recent improvements.
Challenges of the Crude-for-Naira Deal
The naira-for-crude scheme was approved in October 2024 by the Federal Executive Council (FEC), allocating 450,000 barrels of crude for domestic refining.
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