Federal Government Considers Renewal of Naira-for-Crude Deal as Dangote Refinery Halts Naira Sales, Turns to Global Suppliers
There are strong indications that the Federal Government may extend its naira-for-crude policy, as insider sources confirmed on Monday that stakeholders will reconvene soon to discuss the deal’s future.
The first phase of the six-month agreement between the Federal Government, the Nigerian National Petroleum Company Limited (NNPC), and the Dangote Petroleum Refinery officially ended on March 31, 2025. However, no renewal has been announced, leading Dangote Refinery to halt sales of refined petroleum products in naira.
Despite the lapse, sources close to the negotiations insist the policy remains under consideration. A senior government official revealed that the government recognizes the deal’s positive impact on fuel prices, foreign exchange rates, and the broader economy. However, progress on the renewal is awaiting a report from the Nigeria Upstream Petroleum Regulatory Commission.
Dangote Refinery Turns to Global Suppliers Amid Uncertainty
As the naira-for-crude deal remains in limbo, Dangote Refinery has been expanding its crude supply sources. A report by S&P Global stated that the refinery has processed approximately 400,000 barrels per day (bpd) of crude in 2025 so far, with about 35% sourced from international imports. This includes crude shipments from Brazil and Equatorial Guinea.
Brazil’s Petrobras delivered one million barrels of Tupi crude on March 26, while shipments from Equatorial Guinea are expected soon. The report highlights that Dangote’s diversification of supply sources has been partly driven by inconsistent domestic crude allocations from NNPC.
Since the refinery began operations, NNPC has struggled to meet its supply commitments. While it initially pledged 300,000 bpd at discounted rates, it delivered only around 280,000 bpd in naira by March 10, 2025—falling short of the agreed 385,000 bpd. The company has also reduced its stake in the Dangote project from 20% to 7.2% in July 2024.
Concerns Over Economic Impact and Fuel Prices
While negotiations for a potential renewal continue, concerns have been raised about the impact of ending the naira-for-crude arrangement. The Human Rights Writers Association (HURIWA) has called on President Bola Tinubu to ensure the policy’s continuation, warning that its termination could lead to sudden fuel price hikes and increased economic hardship for millions of Nigerians.
In a statement signed by its National Coordinator, Emmanuel Onwubiko, HURIWA urged the government to act swiftly.
“In the spirit of the Sallah celebrations and considering the public supplications of the President and other officials, we appeal to President Tinubu to direct his economic team to reach a transparent and rapid agreement to continue the naira-for-crude deal,” the statement read.
The group warned that failure to renew the agreement could force small and medium-scale enterprises reliant on fuel-powered generators to shut down, while job losses in the private sector could rise.
Next Steps for the Naira-for-Crude Deal
Despite uncertainty surrounding the policy’s future, discussions on its renewal are ongoing. NNPC recently stated that it had supplied 48 million barrels of crude to the Dangote refinery under the deal, while a total of 84 million barrels had been delivered since the refinery’s operations began in 2023.
As NNPC allocates seven crude cargoes to supply Dangote in April, finalizing payment terms remains a key hurdle. Dangote executives have expressed concerns over the policy’s commercial viability, citing risks associated with pricing crude in naira while pegging product prices to the dollar.
While the government weighs its options, the decision to renew or scrap the naira-for-crude deal will have far-reaching implications for Nigeria’s energy sector, fuel prices, and overall economic stability.
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