By The Dangote Petroleum Refinery has taken delivery of four cargoes of crude oil from the Nigerian National Petroleum Company Limited (NNPCL) under the recently introduced naira-for-crude agreement. This was confirmed by officials from both the refinery and the Federal Government on Tuesday.
According to sources, the four cargoes were delivered within the past three weeks as part of the government’s initiative to sell crude oil to local refineries in naira. The refinery is expected to receive additional shipments from NNPCL in the coming weeks, with a source from the Domestic Sale of Crude Oil in Local Currency Committee indicating that more deliveries are planned.
The $20 billion Lekki-based refinery is set to commence selling refined petroleum products, including Premium Motor Spirit (PMS), or petrol, to local dealers. The first phase of the naira-for-crude agreement is scheduled to last for six months, with the possibility of renewal.
A refinery official confirmed the progress but did not disclose the cost of the crude oil per barrel. “The naira-for-crude deal has begun, and we have received four cargoes so far. More are expected in the coming weeks,” the official said. The agreement is part of a broader effort to boost domestic refining capacity and reduce reliance on imported fuel.
Earlier this year, the Dangote refinery faced challenges in securing crude oil, with the company alleging that some international oil companies (IOCs) were obstructing supply by insisting on selling crude through foreign intermediaries at inflated prices. Despite interventions by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Dangote Group maintained that IOCs were still frustrating efforts to obtain local crude for refining.
In response to these challenges, President Bola Tinubu proposed the sale of crude oil to local refineries in naira, which the Federal Executive Council adopted in July. The council approved the supply of 450,000 barrels per day for domestic consumption, with Dangote Refinery serving as a pilot for the program.
As part of the agreement, the NNPCL is expected to supply about 385,000 barrels of crude oil daily to the refinery, with equivalent volumes of refined products, such as petrol, diesel, and aviation fuel, being sold in naira.
Industry stakeholders, including the Independent Petroleum Marketers Association of Nigeria (IPMAN), welcomed the supply of crude to Dangote Refinery, noting that it would help address fuel supply shortages. However, concerns remain over pricing and the supply-demand dynamics, with some operators calling for a fixed exchange rate for the transaction to ensure affordability.
With domestic petrol imports dropping sharply in early October, the increase in local refining capacity is expected to ease pressure on fuel imports and stabilize the fuel market in Nigeria.
