Dangote Refinery has suspended the distribution of petroleum products within Nigeria due to the ongoing deadlock in renegotiating the naira-for-crude oil agreement with the Nigerian National Petroleum Corporation (NNPC).
Insiders familiar with the matter revealed to TheCable that while the refinery will no longer supply Nigerian marketers, it will continue exporting petroleum products.
The decision stems from the refinery’s dependence on crude oil purchased exclusively from international markets, paid for in US dollars rather than naira, as was previously permitted under the now-defunct agreement.
The naira-for-crude arrangement, which allowed Dangote Refinery to acquire crude from NNPC using the local currency, has officially ended.
This setup had enabled the refinery to sell refined products to Nigerian buyers in naira.
On March 10, TheCable reported that NNPC had discontinued the deal not just with Dangote Refinery but also with other local refineries.
Following the report, Olufemi Soneye, NNPC’s Chief Corporate Communications Officer, clarified that the agreement—initiated in October 2024—was set to officially conclude by the end of March 2025.
He also noted that discussions were still ongoing for a potential renewal of the deal.
Since the agreement’s inception, NNPC has supplied Dangote Refinery with over 48 million barrels of crude, bringing the total to 84 million barrels since the facility commenced operations in 2023.
The initiative aimed to enhance local crude transactions in naira, curb foreign exchange outflows on petroleum imports, and ultimately lower fuel prices.
However, with the deal’s expiration, Nigeria’s refining sector faces a significant shift.
The refinery’s decision to halt local fuel sales raises concerns about potential impacts on the domestic petroleum market, especially as negotiations for a new agreement remain unresolved.
Observers continue to monitor the situation, given its implications for Nigeria’s efforts to stabilize its petroleum industry and reduce reliance on fuel imports.
