LESS than six hours after News Point Nigeria had reported the suspension of the naira-for-crude oil swap deal with domestic refiners, including Dangote Refinery and other private operators, the Nigerian National Petroleum Company (NNPC) Limited has clarified that the six-month agreement will end in March but discussion are ongoing for renewal.
Recall earlier on Monday (today), News Point Nigeria reported that there is growing unease after the NNPC suspended the naira-for-crude oil swap deal with domestic refiners, including Dangote Refinery and other private operators.
This newspaper reported that the decision, which took immediate effect, had sparked discussions about its implications for Nigeria’s energy sector and the broader economy.
The naira-for-crude arrangement, introduced on October 1 2024, allowed local refiners to purchase crude oil in naira instead of dollars. The initiative was designed to support domestic refining capacity, reduce reliance on imported petroleum products, and stabilize the local currency by easing pressure on foreign exchange reserves.
The earlier report added that with the termination of the agreement, Nigerian refineries, including the much-anticipated Dangote facility, will now have to source crude oil from international suppliers, paying in dollars instead of naira. This shift is expected to escalate operational costs, potentially leading to higher fuel prices at the pump.
According to credible sources familiar with the development, the NNPC informed local refiners that it has already committed its crude oil production to forward contracts, leaving no supply available for domestic refineries. This revelation comes despite reports that Nigeria’s crude output has increased since the deal first began.
But in swift response to the News Point Nigeria‘s story, the Chief Corporate Communications Officer of the NNPC, Olufemi Soneye, in a statement late on Monday, said the contract for the sale of crude oil in Naira was structured as a six-month agreement, subject to availability, and expires at the end of March 2025. Discussions are currently ongoing towards emplacing a new contract.
See full statement below:
PRESS RELEASE
Re: Clarification on the Naira Crude Contract Between NNPC Limited and Dangote Refinery
NNPC Limited has noted recent reports circulating in the media regarding the alleged unilateral termination of the crude oil sales agreement in Naira between NNPC and Dangote Refinery.
To clarify, the contract for the sale of crude oil in Naira was structured as a six-month agreement, subject to availability, and expires at the end of March 2025. Discussions are currently ongoing towards emplacing a new contract.
Under this arrangement, NNPC has made over 48 million barrels of crude oil available to Dangote Refinery since October 2024. In aggregate, NNPC has made over 84 million barrels of crude oil available to the Refinery since its commencement of operations in 2023.
NNPC Limited remains committed to supplying crude oil for local refining based on mutually agreed terms and conditions.
Olufemi Soneye
Chief Corporate Communications Officer
NNPC Ltd
Abuja
10th March, 2025
See link for News Point Nigeria’s earlier story below:
Unease As NNPC Suspends Naira-For-Crude Deal For Dangote, Others
https://antiquewhite-elephant-634158.hostingersite.com/unease-as-nnpc-suspends-naira-for-crude-deal-for-dangote-others/