Fuel crisis looms as Dangote Refinery set to stop supplying Nigerian market
Dangote Refinery is set to stop the supply of petroleum products to the Nigerian market following stalled negotiations over the naira-for-crude oil deal with the Nigerian National Petroleum Company (NNPC) Limited.
According to sources, while the refinery will cease fuel distribution domestically, it will continue to export petroleum products as it currently sources crude oil exclusively from the international market, paying in U.S. dollars.
The naira-for-crude agreement, which allowed Dangote Refinery to purchase crude oil in local currency while supplying fuel to Nigerian marketers in naira, has officially ended.
On March 10, reports emerged that NNPC had discontinued the arrangement with Dangote Refinery and other local refineries.
However, NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, later clarified that the deal, which commenced in October 2024, was still in effect but would expire at the end of March 2025.
He also revealed that discussions were ongoing for a potential renewal of the agreement.
Since October 2024, NNPC has reportedly supplied over 48 million barrels of crude oil to Dangote Refinery, with a total of 84 million barrels delivered since the facility began operations in 2023.
The naira-for-crude deal was initially introduced to boost domestic supply, reduce reliance on costly petroleum imports, and lower fuel prices. However, the current impasse raises concerns about fuel availability and potential price hikes in Nigeria.
