There is a raging concern that the Naira-for-Crude initiative, which ensures local refineries receive crude oil in Naira and sell refined products to marketers in the local currency, may be threatened over inadequate crude supply to domestic refiners.
President Bola Ahmed Tinubu had directed the sale of crude oil to Dangote in naira as part of move to bring down the cost of premium motor spirit (pms) otherwise known as petrol.
In October 2024, the Federal Executive Council (FEC) approved that 450,000 barrels intended for domestic consumption be offered in Naira to Nigerian refineries, with the Dangote Refinery acting as a pilot project.
Under the scheme which commenced in the first week of October 2024, the NNPCL was expected to supply 385,000 barrels of crude oil to the 650,000 bdp Dangote Refinery located in Ibeju-Lekki Lagos.
However, according to a report by The Nation, there has been a consistent low supply of allocations to Dangote Refinery, forcing it to resort to importation.
Citing official documents, the report pointed out that while Nigeria’s crude oil production has marginally increased, exceeding 1.8mbpd, there has been a sharp decline in the volume of crude allocated to the Naira-for-Crude scheme.
The document revealed that for February 2025, the scheme has been allocated only four cargoes, and for March, just two cargoes totalling 950,000 barrels (1.9 million barrels in total for the month). This represents an allocation of 61,290 barrels per day – far below the 385,000 bpd target under the scheme.
The Dangote refinery is set to receive 12 million barrels of crude oil from the United States, as local supply constraints have hindered its bid to attain full refining capacity of 650,000 barrels per day.
Amidst this challenge, it was learnt that the Nigerian National Petroleum Corporation (NNPC) Limited and allied marketers continue importing petroleum products into the country, spending over N5 trillion on importing Premium Motor Spirit (PMS) and diesel (AGO) within 110 days.
An oil and gas expert in the public sector, who spoke on the condition of anonymity, warned that the Naira-for-Crude initiative might be undermined and threatened the potential for improving energy security in Nigeria.
A source at the Dangote Refinery who spoke on the condition of anonymity explained that in line with its commitment to serving Nigerians and keeping prices affordable, the refinery continues to sell products to marketers in Naira, while absorbing logistics costs to ensure uniform pricing across the country.
“The Refinery generously assumes equalisation status, which only the government does undertake. This has been met with enthusiasm by our partners, such as MRS, Heyden, and Ardova. The Petroleum Products Retail Outlet Owners Association has entered into an agreement with the refinery to distribute its PMS nationwide at a uniform price across all its filling stations,” he said.
