Revealed! FG, Dangote set to resume naira-for-crude deal again

• There are indications that the Federal Government's naira-for-crude strategy mightiness persist
• Insiders acquainted with the contented believed that the agreement's parties volition get backmost unneurotic shortly
• This occurred arsenic Dangote refinery ceased selling refined petroleum products successful naira

Legit.ng writer Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

There are hints that the naira-for-crude argumentation of the Federal Government whitethorn continue, arsenic insider sources acquainted with the improvement insisted connected Monday that each parties progressive successful the statement would reassemble soon.

So acold successful 2025, the Dangote refinery has processed much than 400,000 barrels of crude lipid each day. Photo Credit: FG, Dangote Group
Source: Getty Images

The archetypal portion of the six-month statement betwixt the Federal Government, Nigerian National Petroleum Company Limited, and Dangote Petroleum Refinery ended March 31, 2025.

Since the naira-for-crude statement has not been extended, Dangote refinery has ceased selling refined petroleum products successful naira.

Dangote imports 12.6 cardinal barrels of crude

According to a study released by S&P Global connected Monday, the Dangote refinery has processed implicit 400,000 barrels of crude lipid per time successful 2025 frankincense far, with astir 35% of the proviso coming from imports.

This indicates that the works imported 12.6 cardinal barrels of crude lipid during the people of 3 months, oregon astir 140,000 barrels each day.

A elder authorities authoritative who is alert with the operations of the committee successful complaint of the declaration said that the medication has not ruled retired the naira-for-crude strategy.

“The inaugural is going to proceed due to the fact that it is present evident that the argumentation has a large interaction connected not conscionable substance prices, but besides connected different economical indices. It besides positively impacted the FX rate.“However, the committee is awaiting the Nigeria Upstream Petroleum Regulatory Commission’s submission connected the task fixed to it arsenic regards the policy. Once that is done, the adjacent happening should beryllium the mode guardant arsenic regards the naira-for-crude policy,” the source, who spoke to 1 of our correspondents successful assurance owed to the deficiency of authorisation to talk connected the matter, stated.

In bid to summation supplies, prevention the federation millions of dollars connected petroleum merchandise imports, and yet little substance pump costs, the authorities started selling crude lipid to the Dangote refinery successful naira connected October 1, 2024.

According to NNPC, 48 cardinal barrels of crude lipid were delivered to the Dangote refinery successful naira arsenic portion of the agreement. Additionally, it stated that since it started operating successful 2023, the refinery has received 84 cardinal barrels of crude.

In a statement, Olufemi Soneye, the Chief Corporate Communications Officer of NNPC, clarified that the archetypal statement was for a play of six months and that negotiations were present underway to widen it to make a caller contract.

According to a firm executive, the S&P survey besides disclosed that the Dangote refinery had obtained its archetypal crude lipid from Equatorial Guinea and Brazil, arsenic the company's request to diversify its feedstock was prompted by the unstable home supply.

The archetypal shipment of Brazil's Tupi crude was delivered to the refinery connected March 26 by Petrobras, carrying 1 cardinal barrels of the mean saccharine grade, according to information from S&P Global Commodities astatine Sea.

According to the vessel tracking data, supplies from Equatorial Guinea person not yet been shipped, but they volition soon beryllium added to the expanding database of crude grades that the mill is processing.

“We person started sourcing globally,” a refinery enforcement told S&P Global Commodity Insights. The authoritative besides confirmed that the institution present counts Brazil and Equatorial Guinea among its planetary lipid suppliers.“Dangote has received astir 400,000 b/d of crude lipid successful 2025 to date, of which astir 35 per cent was imported internationally,” the S&P study stated, quoting information obtained from the CAS data.

According to CAS data, the nationalist lipid steadfast lowered its ownership of the task from 20% to 7.2% successful July aft providing astir one-third of the astir 300,000 barrels per time of discounted lipid it had primitively committed to the refinery.

As portion of an effort to little the terms of Nigerian fuel, it consented to commencement providing Dangote with lipid successful naira successful October and momentarily took implicit arsenic its lone supplier.

However, by March 10, the NOC had delivered astir 280,000 barrels of crude per time successful naira to Dangote, which was little than the 385,000 barrels per time that was agreed upon successful the agreement, according to NNPC records. Officially, the six-month statement expired connected Monday, March 31, 2024.

There are hints that the naira-for-crude argumentation of the Federal Government whitethorn continue. Photo Credit: Contributor
Source: Getty Images

Plans to reopen deal

In response, a Dangote enforcement who spoke to S&P Global said that determination was a large woody of uncertainty astir the aboriginal of a caller naira-for-crude deal, saying, "We are not adjacent definite if it volition beryllium renewed oregon if it volition proceed astatine all."

In summation to the difficulties facing NNPC, helium claimed that Dangote's work to merchantability its lipid products successful naira nether the woody had go a hindrance to its operations, leaving the refinery susceptible to terms swings by tying declaration prices to dollar-based benchmarks and converting them into naira astatine the constituent of sale.

The source,

“It’s not commercially advantageous for america erstwhile we bargain successful naira and merchantability successful naira, the forex hazard betwixt the clip of buying crude and selling the products whitethorn not beryllium afloat covered”.

NNPC has assigned 7 crude lipid cargoes to transport astir 245,000 barrels per time to the Dangote installation successful April, but outgo arrangements person not yet been agreed upon, according to commercialized sources and Nigerian larboard authorities.

Depot owners criticise naira-for-crude

Legit.ng reported that Olufemi Adewole, the Executive Secretary of the Depot and Petroleum Products Marketers Association of Nigeria, has criticised the Federal Government's naira-based sale of crude lipid to the Dangote Petroleum Refinery.

Adewole asserted that determination are superior dangers associated with the naira-for-crude lipid transaction structure, which mightiness person an interaction connected Nigeria's overseas speech stableness and discourage overseas nonstop investment.

In a connection connected Monday, Adewole expressed concerns astir the volatility of the naira and emphasized that crude lipid transactions were traditionally conducted successful US dollars owed to its stableness and planetary acceptability.

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Source: Legit.ng