The Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery’s managements have initiated fresh negotiations on the renewal of the naira-for-crude agreement based on the March 31 expiration date of their initial deal on the initiative.
The NNPCL’s management gave this hint in a statement issued by the Chief Corporate Communications Officer, Olufemi Soneye, on Monday to debunk news reports that it had suspended the naira-for-crude deal until 2030, as it has forward-sold all its crude oil.
The spokesman clarified that the initial deal was for six months and that discussions for the renewal of the agreement had been opened between the two parties, with the aim of establishing a new contract.
According to him, based on the deal initiated in October 2024, the 650,000-capacity refinery has received 48 million barrels to refine for petroleum products, while a total of 84 million barrels has been supplied to the refinery since it commenced operations in 2023.
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The statement partly reads: “NNPC Limited has noted recent reports circulating on social media regarding the alleged unilateral termination of the crude oil sales agreement in naira between NNPC and Dangote Refinery.
“To clarify, the contract for the sale of crude oil in naira was structured as a six-month agreement, subject to availability, and expires at the end of March 2025. Discussions are currently ongoing towards emplacing a new contract.
“Under this arrangement, NNPC has made over 48 million barrels of crude oil available to Dangote Refinery since October 2024. In aggregate, NNPC has made over 84 million barrels of crude oil available to the refinery since its commencement of operations in 2023.
“The national oil firm further reaffirmed its commitment to supplying crude oil for local refining based on mutually agreed terms and conditions“, it added.
In his remarks made in an e-signed statement, the Chairman of the Technical Sub-Committee on the naira-for-crude deal, Dr. Zacch Adedeji, reaffirming the government’s position on the initiative, adding that the termination of the contract was never a consideration.
According to him, there is substantial evidence supporting the policy as the correct approach and affirmed that it will continue to contribute positively to the nation’s economy.
Adedeji, who is also the Chairman of the Federal Inland Revenue Service (FIRS), clarified: “The policy framework enabling the sale of crude oil in naira for domestic refining remains in force. The initiative was designed to ensure supply stability and optimize the utilisation of local refining capacity. There has been no decision at the policy level to discontinue this approach, nor is it being considered. After implementing the policy for some months, evidence abounds that it is the right way to go, and it will continue to help the economy.
“The framework for domestic crude transactions is designed to promote a competitive and efficient pricing environment”, he added.
This is even as he reaffirmed that local refineries were not excluded from domestic crude supply and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) was actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.
Adedeji expatiated: “The engagement process for crude oil supply to domestic refineries therefore remains in place by structured agreements, balancing factors such as availability, demand, and market conditions. There is no exclusion of local refineries from access to domestic crude oil. The Nigerian Upstream Petroleum Regulatory Commission is actively ensuring compliance with the Domestic Crude Oil Obligations provisions of the Petroleum Industry Act.
“We remain committed to ensuring the efficient execution of this initiative in line with its core objectives – enhancing local refining, reducing foreign exchange exposure, and stabilising the domestic fuel supply,” he added.
It would be recalled that on October 1 last year the Federal Government commenced the sales of crude oil in Naira to local refineries to improve supply, lessen the pressure on the foreign reserves associated with refined petroleum products imports, and reduce the pump prices of refined products.
