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Nigerian downstream oil and gas operators are anxiously awaiting the Federal Government’s decision on the naira-for-crude deal between the Nigerian National Petroleum Company Limited (NNPCL) and the Dangote Petroleum Refinery. The six-month deal, which began in October 2024, officially ended on Monday, March 31, 2025.
The deal’s extension or termination is still being discussed by the parties involved. However, as of Sunday, the committee responsible for the negotiations had yet to reach a resolution. This uncertainty has led to an increase in petrol prices, with prices rising from around N860/litre to over N930/litre within a week.
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Dealers blame the Federal Government’s failure to extend the naira-for-crude deal for the price hike. They project that petrol prices may reach N1,000/litre in weeks if the issue is not resolved. The Dangote refinery is expected to shut down its petrol-producing unit for maintenance in June, which may further exacerbate the situation.
A senior government official familiar with the negotiations revealed that no significant progress had been made. “Nothing new has happened. Probably after the holidays, the committee will sit and meet,” the official said.
The naira-for-crude deal was initiated in October 2024 to improve supply, save the country millions of dollars in petroleum product imports, and reduce fuel prices. However, the Dangote refinery recently announced a temporary suspension of the sale of petroleum products in Naira due to a mismatch between its sales proceeds and crude oil purchase obligations denominated in US dollars.
The refinery stated, “To date, our sales of petroleum products in Nigeria have exceeded the value of naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency.”
Industry sources attribute the deal’s failure to the NNPCL’s use of large volumes of its yet-to-be-produced crude oil to acquire loans from international financial institutions, making it challenging for the oil firm to supply the domestic market.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, expressed concern over the situation, stating that it was the sole reason for the upward movement in petrol prices. He announced that a stakeholders’ meeting has been called to discuss the issue and find a way forward.
Ukadike said, “Because of this issue, we’ve called for a stakeholders meeting. We are going to meet to discuss it and come up with a way forward. We clamoured that crude oil should be sold in naira, and any deviation would affect us.”
The IPMAN Vice President, Hammed Fashola, warned that Nigerians might have to pay N1,000/litre for petrol again if the sale of crude in naira is not reconsidered with the Dangote Group. He described the price hike as unfortunate and called on members of the Depot and Petroleum Products Marketers Association of Nigeria to pity the poor masses.
Fashola said, “Though the price of crude oil and the exchange rate are the major factors determining the prices of petroleum products, the naira-for-crude arrangement would help to tame the local price of fuel.
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