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The Nigerian National Petroleum Company (NNPC) Limited has halted its naira-for-crude arrangement with Dangote Petroleum Refinery and other local refineries till 2030.
Consequently, domestic refineries will now have to source crude oil from international suppliers and pay in dollars rather than naira, which will expectedly increase production costs.
This development has sparked concerns about a potential rise in fuel prices.
NNPC sources disclosed that the company has already informed refineries that it has forward-sold all its crude oil, despite the country’s increased crude production since the deal was launched on October 1, 2024, to encourage local refining, reduce Nigeria’s dependence on imported fuel, and lower petrol prices.
According to an industry source: “NNPC has informed Dangote Petroleum Refinery and other refiners that it can no longer supply them with crude oil, as all its crude has been forward-sold until 2030.”However, the Dangote refinery is yet to issue any official response even though the company is reportedly assessing their options before taking further action.
Critics have condemned the NNPC decision, saying its unilateral action came when Nigerians we’re actually expecting further fuel price reductions.
