The Nigeria National Petroleum Company Limited (NNPCL) has clarified the end of the Naira-for-Crude arrangement with local refineries, disclosing that it supplied the Dangote refinery with 84 million barrels of crude oil since it began operation.
Nairametrics earlier reported that the Naira-for-crude initiative of the federal government had ended.
According to the National Secretary of the Crude Oil Refinery-owners Association of Nigeria (CORAN), Eche Idoko, the pilot phase of the arrangement ended this month and it is yet to be renewed.
“The Naira for Crude agreement was supposed to end in March as the first phase and it has ended and we are yet to get the government’s renewal,” Idoko told Nairametrics in an exclusive chat.
In a statement issued on Monday by the NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, he confirmed that the pilot phase of the arrangement was made for six months.
Soneye denied claims in a section of the media that the NNPC terminated the Naira-for-Crude contract with the Dangote refinery.
“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.
“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,” he noted.
Discussion ongoing for renewal
Soneye noted that discussions are ongoing to renew the Naira-for-Crude arrangement. “Discussions are currently ongoing towards emplacing a new contract,” he noted.
He said the national oil company is committed to supplying crude oil for local refining based on mutually agreed terms and conditions.
What you should know
Last year, the Federal Executive Council (FEC) approved the Naira-for-Crude initiative in which local refineries will be supplied crude oil in Naira rather than dollars, with the aim of stabilizing fuel pump prices and the dollar-Naira exchange rate.
However, Nairametrics reported that the implementation of the initiative was inconsistent, causing local refineries to struggle for crude supplies to maintain operations.
Despite the recent boost in Nigeria’s crude oil production, and the growing number of local refineries, the country continues to import both crude oil and refined petroleum products.
