The Federal Government and Dangote Petroleum Refinery are set to reconvene for discussions on the naira-for-crude policy, amid uncertainties surrounding its renewal.
The initial six-month agreement, which involved the Nigerian National Petroleum Company Limited (NNPC) supplying crude oil to Dangote Refinery in exchange for naira payments, ended on March 31, 2025, with no immediate renewal in place.
As a result of the policy lapse, Dangote Refinery has halted the sale of refined petroleum products in naira, reverting to dollar-denominated transactions. However, sources within the government suggest that the deal may be reinstated, given its significant impact on fuel prices and foreign exchange stability.
A senior official familiar with the committee overseeing the agreement confirmed ongoing deliberations. “The initiative is expected to continue due to its positive influence on economic indices, particularly fuel prices and foreign exchange rates. The Nigeria Upstream Petroleum Regulatory Commission is finalizing its recommendations, after which a decision on the policy’s future will be made,” the source stated.
The naira-for-crude initiative was introduced on October 1, 2024, to reduce Nigeria’s reliance on dollar-based petroleum imports and stabilize pump prices. Under the deal, Dangote Refinery received 48 million barrels of crude oil in naira, with total supplies reaching 84 million barrels since the refinery commenced operations in 2023.
Meanwhile, a report by S&P Global on Monday revealed that the refinery has processed an average of 400,000 barrels per day (bpd) so far in 2025. Of this volume, approximately 35%—equivalent to 140,000 bpd, or 12.6 million barrels over three months—was sourced from international imports.
The report further disclosed that Dangote Refinery has expanded its crude supply network beyond Nigeria, recently securing its first shipments from Brazil and Equatorial Guinea. Data from S&P Global Commodities at Sea indicated that Petrobras, Brazil’s state oil company, shipped one million barrels of Tupi crude to the refinery on March 26, while shipments from Equatorial Guinea are expected soon.
A Dangote Refinery executive speaking to S&P Global acknowledged the company’s shift towards global crude sourcing. “We have started sourcing globally,” the executive stated, adding that the refinery now counts Brazil and Equatorial Guinea among its suppliers.
Despite these developments, uncertainty lingers over the renewal of the naira-for-crude agreement. An executive at Dangote Refinery expressed concerns over the policy’s commercial viability, noting that selling refined products in naira exposed the refinery to forex risks. “When we buy in naira and sell in naira, the forex risk between crude purchases and product sales may not be fully covered,” the executive explained.
Meanwhile, NNPC has allocated seven crude cargoes for April deliveries to Dangote Refinery, amounting to approximately 245,000 bpd. However, final payment terms have yet to be agreed upon.
Amid ongoing deliberations, the Human Rights Writers Association (HURIWA) has urged President Bola Tinubu to ensure the continuation of the naira-for-crude deal. The group warned that discontinuing the agreement could lead to a spike in fuel prices, worsening economic hardship for millions of Nigerians.
In a statement signed by its National Coordinator, Emmanuel Onwubiko, HURIWA called on the President to instruct his economic team to finalize a new agreement with local refineries. “Any alteration to this deal would mean excruciating hardship and increased poverty for millions of Nigerians,” the statement read, emphasizing the potential consequences for businesses and households reliant on affordable fuel.
As discussions progress, industry stakeholders and economic analysts will closely watch the government’s decision, given the policy’s potential impact on inflation, fuel prices, and foreign exchange stability.
