NNPC Speaks On Terminating Crude-For-Naira Initiative With Dangote Refinery

The Nigeria National Petroleum Company Limited (NNPCL) has explained that it did not unilaterally terminate the crude-for-naira agreement between it and Dangote Refinery.

The national oil company also explained that it remains committed to making crude oil available to local refineries.

Naija News reports that the NNPC made the clarification following reports that it had halted the naira-for-crude arrangement with Dangote Petroleum Refinery and other local refineries, a move that could lead to an increase in petrol prices.

The move would mean local refineries, including Dangote, will now have to source crude oil from international suppliers, which will significantly raise costs due to dollar-denominated transactions.

Sources indicated that the NNPC had informed refiners that all its crude oil has been forward-sold, despite an increase in production since the agreement began.

But reacting to the report, the Chief Corporate Communications Officer of the NNPCL, Olufemi Soneye, in a statement on Monday, said 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.

He added that discussions are ongoing to put in place a new contract.

The statement titled ‘Re: Clarification on the Naira Crude Contract Between NNPC Limited and Dangote Refinery,’ 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 Ltd. 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 Ltd. has made over 48 million barrels of crude oil available to Dangote Refinery since October 2024. In aggregate, NNPC Ltd. has made over 84 million barrels of crude oil available to the Refinery since its commencement of operations in 2023.

“NNPC Limited remains committed to supplying crude oil for local refining based on mutually agreed terms and conditions.”