NNPC
By Victory Oghene
News emanating from the Nigeria’s energy sector indicate that the Nigerian National Petroleum Company (NNPC) Limited has suspended the naira-for-crude oil swap deal with domestic refiners, including Dangote Refinery and other private operators.
The decision, which NATIONAL WAVES gathered took immediate effect, was received with shock and disbelief by stakeholders.
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 termination of the agreement means that 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 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.
Dangote Refinery and other private refiners, including Waltersmith Petroman and BUA Refinery, are also expected to feel the impact of the suspension. The deal had provided them with a cost-effective way to secure crude oil feedstock, enabling them to compete with international players.
