The Nigerian National Petroleum Company Limited (NNPC) has begun fresh negotiations with the Dangote Petroleum Refinery regarding the renewal of their naira-for-crude oil agreement, which is set to expire on March 31, 2025.
This comes amid reports that the initial six-month deal, which commenced in October 2024, is being renegotiated. The NNPC clarified that the agreement was always intended to be subject to renewal, confirming earlier reports by The PUNCH newspaper.
NNPC Chief Corporate Communications Officer, Olufemi Soneye, stated that discussions are underway to establish a new contract. He confirmed that the Dangote refinery has received over 48 million barrels of crude oil since October 2024, and a total of 84 million barrels since it began operations in 2023.
The agreement allows the refinery to purchase crude oil in naira, aiming to boost domestic supply and reduce reliance on imported fuel.
Zacch Adedeji, Chairman of the Technical Sub-Committee on the naira-for-crude deal, reaffirmed the government’s commitment to the policy, stating that it will continue to benefit the economy. He clarified that there has been no decision to discontinue the approach.
“The policy framework enabling the sale of crude oil in naira for domestic refining remains in force,” Mr Adedeji said. “Evidence abounds that it is the right way to go.”
Eche Idoko, Publicity Secretary of the Crude Oil Refinery-Owners Association of Nigeria, confirmed that the renewal was part of the original plan. He urged the government to extend the agreement to include modular refineries, as initially promised.
Analysis of NNPC data reveals that the Dangote refinery received crude oil worth approximately N486.31bn between October and December 2024. However, some payments are yet to be remitted. The refinery received varying amounts of crude oil throughout this period, with the largest single allocation being 598,125 barrels on October 14, 2024.
The NNPC reiterated its commitment to supplying crude oil for local refining based on mutually agreed terms.
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