The Nigerian National Petroleum Company (NNPC) Limited has suspended the naira-for-crude deal with Dangote Petroleum Refinery and other local refineries.
The development is likely to lead to an increase could in the pump price of petrol as local refineries will now have to import crude from international suppliers at huge cost.
Sources familiar with the development said the NNPC has informed the refineries that it has forward-sold all its crude.
This is happening in spite an increase in production, compared to what it was at the time the deal commenced in October, 2024.
The naira-for-crude swap was initiated by the federal government to make crude available to local refineries, save the country millions of dollars in petroleum products imports and reduce pump price of petrol.
However, it was gathered that the deal has now been put off until 2030.
It was learnt that the NNPC has already notified Dangote Petroleum Refinery and other local refiners that it will no longer provide crude oil to them, as it has forward-sold all of its crude supplies until 2030.
Oil marketers in the country spent an estimated N6 trillion on the importation of petroleum products, particularly petrol and diesel over a five-month period in spite improved domestic refining capacity in Nigeria.
The Nigerian Mid-stream and Downstream Regulatory Authority (NMDPRA) disclosed recently that Nigeria currently has a combined domestic refining capacity of 985,000 barrels per day, a figure enough to meet daily consumption of 50 million litres per day.
The marketers, however, imported 6.38 billion litres of petrol and diesel in five months, putting pressure on scare foreign exchange.
The NNPC is said to be among the entities still importing products.
The decision to end the naira-based crude supply might lead to volatility in the foreign exchange (FX) market, thereby eroding recent gains, according to market analysts.
In October 2024, the federal executive council (FEC) approved the allocation of 450,000 barrels of crude intended for domestic consumption to be sold in naira to Nigerian refineries, with the Dangote refinery serving as a pilot project.
Under the scheme, the NNPC was expected to supply 385,000 barrels per day of crude oil to the Lekki-based refinery.
However, the national oil firm has been accused of consistently failing to meet the allocation.
In November 2024, the refinery said the crude-for-naira initiative was faltering, as it was still unable to secure adequate supplies.
“We need 650,000 barrels per day, (state oil firm NNPC Ltd) agreed to give a minimum of 385,000 bpd but they are not even delivering that,” Edwin Devakumar, the vice-president of Dangote Industries Limited (DIL) had said.
