There are signs that the Federal Government's naira-for-crude policy may continue, with reliable insider sources revealing on Monday that all parties involved in the agreement are set to reconvene soon.

The first phase of the six-month deal, which included the Federal Government, Nigerian National Petroleum Company Limited, and Dangote Petroleum Refinery, concluded on March 31, 2025.

Although the deal has not been renewed, the Dangote refinery has since halted the sale of refined petroleum products in naira due to the lapse of the naira-for-crude arrangement.

In related news, a report by S&P Global on Monday revealed that the Dangote refinery has processed about 400,000 barrels of crude oil per day in 2025, with roughly 35 percent of this supply coming from international imports.

This suggests that the plant imported approximately 140,000 barrels of crude oil daily, totaling 12.6 million barrels over the span of three months.

A senior government official, who is familiar with the committee overseeing the deal, commented on the naira-for-crude policy, stating that the government has not ruled out its continuation.

“The initiative will continue because it is clear that the policy has a significant impact not only on fuel prices but also on other economic indicators. It has also had a positive effect on the foreign exchange rate.”

“However, the committee is awaiting the submission from the Nigeria Upstream Petroleum Regulatory Commission regarding the task assigned to it in relation to the policy. Once that is received, the next step will be determining the way forward for the naira-for-crude policy,” the source, who spoke on condition of anonymity due to lack of authorization, explained.

It is important to recall that on October 1, 2024, the government began selling crude oil in naira to the Dangote refinery to improve supply, save millions of dollars on petroleum product imports, and ultimately lower fuel pump prices.

The Nigerian National Petroleum Corporation (NNPC) recently confirmed that the Dangote refinery has received 48 million barrels of crude oil in naira under the agreement. NNPC also reported that a total of 84 million barrels of crude oil has been supplied to the refinery since it began operations in 2023.

NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, stated that the initial deal was set for six months and that discussions are currently underway for its renewal, with the goal of establishing a new contract.

Meanwhile, the S&P report also disclosed that the Dangote refinery has secured its first crude oil shipments from Brazil and Equatorial Guinea, according to a company executive. The move to diversify feedstock comes in response to volatile domestic availability.

According to S&P Global Commodities at Sea data, Brazil’s Petrobras delivered the first cargo of Tupi crude to the refinery on March 26, shipping one million barrels of the medium-sweet grade.

Supplies from Equatorial Guinea have not yet been dispatched, according to ship tracking data, but will soon join the growing list of crude grades being processed at the plant.

“We have started sourcing globally,” a refinery executive told S&P Global Commodity Insights, also confirming that Brazil and Equatorial Guinea are now among the refinery’s global oil suppliers.

The S&P report further revealed that Dangote has processed approximately 400,000 barrels per day of crude oil in 2025, with about 35 percent of it being imported from international sources.

Last year, Dangote Chairman Aliko Dangote revealed plans to process Brazilian crude at the plant in July 2024 and mentioned that discussions were underway with Senegal and Libya regarding potential supply routes.

However, given the challenges faced by NNPC, the refinery’s main trade partner and minority stakeholder, the company may have new incentives to establish alternative supply routes. Since the refinery’s operations began, NNPC has consistently underperformed in meeting its supply commitments to Dangote.

After delivering only about a third of the 300,000 barrels per day of discounted oil it initially promised to the refinery, according to CAS data, NNPC reduced its stake in the project from 20 percent to 7.2 percent in July.

In October, NNPC agreed to supply crude to Dangote in naira as part of an effort to reduce Nigerian fuel prices and briefly became the refinery’s sole supplier.

However, NNPC's figures show that by March 10, the NOC had delivered around 280,000 barrels per day of crude to Dangote in naira, falling short of the 385,000 barrels per day agreed upon under the deal. The six-month agreement officially ended on Monday, March 31, 2024.

In response, a Dangote executive, speaking to S&P Global, expressed significant uncertainty about the future of a new naira-for-crude deal, stating, “We are not even certain if it will be renewed or if it will proceed at all.”

In addition to the challenges faced by NNPC, the executive highlighted that the obligation for Dangote to sell its oil products in naira under the agreement had become a burden on its operations. The refinery, he explained, was exposed to price fluctuations by tying contract prices to dollar-based benchmarks and converting them into naira at the point of sale.

“It’s not commercially advantageous for us,” the source stated. “When we buy in naira and sell in naira, the forex risk between the time of buying crude and selling the products may not be fully covered.”

Trade sources and Nigerian port authorities reported that NNPC has allocated seven crude oil cargoes to deliver around 245,000 barrels per day to the Dangote refinery in April, but payment terms have yet to be agreed upon.

HURIWA's Response

The Human Rights Writers Association (HURIWA) has urged President Bola Tinubu to ensure the continuation of the naira-for-crude deal between NNPC and local refineries, including the Dangote refinery.

The group warned that terminating the deal could lead to sudden and severe increases in the pump prices of petroleum products, worsening the hardships already faced by millions of Nigerians.

In a statement signed by its National Coordinator, Emmanuel Onwubiko, HURIWA emphasized the need for a compassionate and humane government. The group called on the President to direct his economic team to swiftly negotiate a new agreement with local refineries.

“In the spirit of the Sallah celebrations and considering the public supplications to God by the President and other public office holders at the end of fasting and Lent, we are praying that President Tinubu directs his Coordinating Minister for the Economy and the Minister of Finance to transparently and quickly reach an agreement to continue the naira-for-crude deal with local refineries, including Dangote Petroleum Refinery,” the statement read.

Onwubiko warned of the economic consequences if the deal is altered, stressing that small and medium enterprises reliant on petrol-powered generators may be forced to shut down, and private sector workers could face job cuts. He also pointed out the strain the deal alleviates for the 133 million Nigerians living in multidimensional poverty, noting that the World Bank had reported that millions more Nigerians had fallen into poverty due to the rising cost of living.

The group urged President Tinubu’s administration not to ignore “the expanding frontiers of mass poverty that any further hike in the pump price of petrol would bring to millions of already overstretched Nigerian households.”