Dangote refinery signs two-year naira crude deal with Nigeria’s national oil company after brief suspension

The announcement comes days after the refinery ”briefly suspended naira sales in the final week of the month, citing the exhaustion of its local-currency allocation, before reversing the decision following the government’s last-minute intervention” Business Insider Africa reported.

The situation sparked renewed concerns about the sustainability of the naira-for-crude initiative, a programme launched last year by President Bola Tinubu to stabilise domestic fuel prices and reduce Nigeria’s reliance on imported crude, mostly from the United States.

Andy Odeh, Chief Corporate Communications Officer of NNPC, stated that “NNPC Limited has continued to allocate crude oil to Dangote Refinery in naira for the sale of products in the domestic market.” He further noted that “the state-owned company and the refinery have negotiated and executed a new Sales and Purchase Agreement, which is set to run until 2027.”

Odeh explained that “in accordance with this agreement, NNPC Limited, DPRP (Dangote Petroleum Refinery and Petrochemical), and NMDPRA periodically reconcile the volume and cost of products supplied in naira, commensurate with the crude delivered. NNPC and DPRP concluded negotiations and, in August, signed a new two-year Sales and Purchase Agreement, allocating three naira crude cargoes in August and five cargoes each for September and October 2025.”

He added that, “crude loading operations for August have been completed, while September operations are currently in progress, with two vessels at terminals undergoing pre-loading formalities. In total, from October 2024 to October 2025, 82 million barrels of crude have been allocated to the refinery, of which 60 per cent (49.3 million barrels) are naira cargoes.”

Prior to this development, a steering committee chaired by the country’s Finance Minister, Wale Edun, and comprising representatives from the Central Bank, Afreximbank, the Federal Inland Revenue Service, and oil regulators, reassured stakeholders over the weekend that the naira-for-crude initiative would continue without interruption.

The committee further emphasised that “the Federal Government remains fully committed to ensuring energy security, protecting consumers, and maintaining stability in the domestic petroleum products market.”

Nonetheless, analysts have cautioned that the initiative remains exposed to potential risks should crude allocations fall short or local-currency payments be unsustainable amid a weakening naira.

At present, the Dangote Refinery, owned by Africa’s richest man, Aliko Dangote, and regarded as central to Nigeria’s energy security, has secured a reliable crude supply, providing assurance to both markets and consumers, while helping to support the country’s foreign exchange stability.