Dangote Halts Fuel Supply to Nigeria Amid Naira-for-Crude Deal Dispute
Dangote Refinery has stopped supplying petroleum products to Nigeria due to the collapse of its naira-for-crude agreement with the Nigerian National Petroleum Company (NNPC) Ltd. Instead, the refinery will continue exporting fuel, as it now sources crude oil in dollars from the global market.
End of the Naira-for-Crude Deal
The naira-for-crude arrangement allowed Dangote Refinery to buy crude in local currency and sell refined products in naira. With this agreement officially ending, concerns are growing over fuel availability and potential price increases in Nigeria.
Reports suggest that the NNPC ended the deal with Dangote and other local refineries. However, company officials clarified that the agreement, which started in October 2024, will officially expire by March 2025. Olufemi Soneye, NNPC’s Chief Corporate Communications Officer, confirmed that discussions are ongoing to establish a new deal.
Fuel Supply and Pricing Concerns
Since October 2024, NNPC has supplied Dangote Refinery with over 48 million barrels of crude oil. In total, the refinery has received more than 84 million barrels since it began operations in 2023. The naira-for-crude arrangement was introduced to stabilize local fuel supply, reduce dependence on dollar-based imports, and keep pump prices in check.
With the deal now discontinued, there are fears that fuel prices could rise further, especially if the refinery prioritizes exports over domestic supply.
Calls for a Quick Resolution
As negotiations continue, industry experts are urging swift action to prevent fuel shortages and economic disruptions. Resolving the issue quickly will be crucial to maintaining stable fuel prices and ensuring Nigerians have access to affordable petroleum products.
