Dangote Refinery halts fuel supply to Nigerian market 

Dangote Refinery has announced plans to stop supplying petroleum products to the Nigerian market following the stalling of renegotiations for the naira-for-crude deal.

Diaspora Digital Media learned that the refinery will, however, continue to load products for export, as it currently sources all its crude stock from the international market in dollars.

The refinery had been selling petroleum products to Nigerian marketers in naira under the now-expired naira-for-crude agreement with the Nigerian National Petroleum Company (NNPC) Limited.

This arrangement allowed Dangote Refinery to purchase crude oil in the local currency, enabling it to sell refined products domestically in naira.

On March 10, DDM reported that NNPC had discontinued the naira-for-crude deal with Dangote Refinery and other local refineries.

Hours after the report, Olufemi Soneye, NNPC’s Chief Corporate Communications Officer, clarified that the current deal, which began in October 2024, would expire at the end of March.

He added that negotiations for a new agreement with Dangote Petroleum Refinery were ongoing.

Soneye revealed that NNPC had supplied over 48 million barrels of crude oil to Dangote Refinery since October 2024.

In total, the state-owned oil company has provided more than 84 million barrels of crude to the refinery since it commenced operations in 2023.

The naira-for-crude deal was initially established to improve domestic fuel supply, reduce Nigeria’s reliance on imported petroleum products, and potentially lower pump prices.

However, with the deal’s expiration and stalled renegotiations, Dangote Refinery has opted to focus on exporting its products, which are traded in dollars.

This development comes amid growing concerns about fuel supply and pricing in Nigeria.

The halt in domestic supply by Dangote Refinery could exacerbate existing challenges in the petroleum market, particularly if alternative arrangements are not made swiftly.

Background on the Naira-for-Crude Deal

The naira-for-crude agreement was a strategic initiative between the federal government and local refineries, including Dangote Refinery, to sell crude oil and refined petroleum products in naira.

The goal was to stabilize the domestic fuel market, reduce foreign exchange pressures, and ensure a steady supply of petroleum products across the country.

However, the deal’s suspension has raised questions about the sustainability of such arrangements and their impact on Nigeria’s energy sector.

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