The Federal Government and Dangote Refinery are set to engage in talks over the renewal of the Naira-for-Crude deal, which expired on March 31, 2025. The development comes as the refinery imported approximately 12.6 million barrels of crude oil in the first quarter of 2025, according to a report by S&P Global.
The Naira-for-Crude deal was initiated by the Federal Government in October 2024, with the aim of improving the supply of petroleum products, saving the country millions of dollars in imports, and ultimately reducing the pump prices of fuel. The deal involved the sales of crude oil in naira to the Dangote refinery, which would then sell its refined products in naira.
According to the Nigerian National Petroleum Company Limited (NNPC), the Dangote refinery received 48 million barrels of crude oil in naira under the deal. The refinery also imported approximately 12.6 million barrels of crude oil in the first quarter of 2025, with about 35% of this supply being sourced from international imports.
Despite the successes recorded, the deal has faced several challenges, including the inability of the NNPC to deliver the agreed-upon quantity of crude oil to the refinery. According to NNPC figures, the company delivered roughly 280,000 barrels per day of crude to Dangote in naira by March 10, falling shy of the 385,000 barrels per day agreed upon under the deal.
The future of the Naira-for-Crude deal remains uncertain, as the Federal Government and Dangote Refinery engage in talks over its renewal. A senior government official familiar with the workings of the committee responsible for the deal stated that the government has not ruled out the policy, citing its positive impact on fuel prices and the economy.
A Dangote executive expressed significant uncertainty regarding the future of the deal, stating that the company is not certain if it will be renewed or if it will proceed at all. The executive also argued that the obligation for Dangote to sell its oil products in naira under the deal had become a drag on its operations, as it exposes the refinery to price fluctuations.
The Human Rights Writers Association (HURIWA) has called on President Bola Tinubu to ensure the continuation of the Naira-for-Crude deal between NNPC and local refineries, including the Dangote refinery. The group warned that the termination of the deal could lead to sudden and indiscriminate hikes in pump prices of petroleum products, thereby exacerbating the hardships faced by millions of Nigerians.
The Naira-for-Crude deal has had a significant impact on the Nigerian economy, improving the supply of petroleum products and reducing the pump prices of fuel. However, the deal has faced several challenges, including the inability of the NNPC to deliver the agreed-upon quantity of crude oil to the refinery. As the Federal Government and Dangote Refinery engage in talks over the renewal of the deal, it remains to be seen whether the policy will continue to benefit the Nigerian economy.