Dangote Refinery has halted the distribution of petroleum products within Nigeria due to stalled negotiations over the naira-for-crude oil agreement with the Nigerian National Petroleum Corporation (NNPC).
Sources with knowledge of the development told TheCable that while the refinery will discontinue supplying Nigerian marketers, it will continue exporting its products.
The decision is tied to the refinery’s reliance on crude oil purchased from international markets, which it pays for in US dollars. This contrasts with the previous arrangement, which allowed payments in naira.
The naira-for-crude deal, which permitted Dangote Refinery to obtain crude from NNPC using Nigeria’s local currency, has now officially ended.
Under this agreement, the refinery was able to sell refined petroleum products to Nigerian buyers in naira.
On March 10, TheCable reported that NNPC had terminated the naira-for-crude arrangement with Dangote Refinery and other local refineries.
Following the report, NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, clarified that the agreement initiated in October 2024 was set to expire at the end of March 2025.
He also confirmed that discussions were underway for a potential renewal of the deal.
Since its inception, the agreement has enabled NNPC to supply Dangote Refinery with more than 48 million barrels of crude oil, totalling 84 million barrels since the refinery began operations in 2023.
The deal was designed to promote local crude transactions in naira, reduce foreign exchange spending on petroleum imports, and ultimately lower fuel costs.
With the agreement now lapsed, Nigeria’s refining landscape faces a major shift.
Dangote Refinery’s decision to halt domestic fuel supply raises concerns about potential market disruptions, especially as discussions over a new arrangement remain unresolved.
Stakeholders are closely monitoring developments, given the broader implications for Nigeria’s petroleum sector and its push to reduce dependence on imported fuel