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The Nigerian National Petroleum Company (NNPC) and Dangote Petroleum Refinery have begun discussions for a new naira-for-crude agreement prior to the expiration of the existing contract on March 31, 2025.
According to the current deal, NNPC has provided 48 million barrels of crude oil to the Dangote refinery since October 2024.
This information was revealed by NNPC in a statement on Monday, following reports suggesting that the government-owned oil company had indefinitely halted the naira-for-crude agreement until 2030 after selling all of its crude oil in advance.
The cessation of this deal would compel refiners to depend on international suppliers for crude oil, resulting in substantial dollar expenditures and an increase in petrol prices at the pump.
However, Olufemi Soneye, NNPC's Chief Corporate Communications Officer, clarified that the existing agreement will finish at the end of March.
"NNPC Limited has observed recent discussions circulating on social media about the supposed unilateral cancellation 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, contingent on availability, and will end in March 2025. Ongoing discussions are focused on establishing a new contract."
Soneye stated that under the current contract, NNPC has made more than 48 million barrels of crude oil available to Dangote refinery since October 2024. "In total, NNPC has supplied over 84 million barrels of crude oil to the Refinery since it began operations in 2023," he noted.
"NNPC Limited remains dedicated to providing crude oil for local refining according to mutually agreed terms and conditions."
The initiative to sell both crude oil and refined petroleum products in naira to local refineries began on October 1, 2024, with the aim to enhance supply, save the nation millions of dollars on imports of petroleum products, and ultimately lower pump prices.
