The Nigerian National Petroleum Company (NNPC) Limited has halted its naira-for-crude arrangement with Dangote Petroleum Refinery and other local refineries, a move that could lead to higher petrol prices.
With the termination of the deal, domestic refineries will now have to source crude oil from international suppliers, incurring higher costs in dollars. Sources indicate that NNPC has forward-sold all its crude, despite increased production levels.
The naira-for-crude initiative, launched in October 2024, aimed to boost local refining, reduce import dependency, and lower fuel prices. However, reports suggest the program has been suspended until 2030.
Industry data shows Nigeria has spent over $4.3 billion importing 6.38 billion litres of petrol and diesel within five months, despite efforts to enhance domestic refining capacity.
The federal government had earlier allocated 450,000 barrels of crude for local refineries, with 385,000 barrels per day earmarked for Dangote Refinery. The sudden policy reversal raises concerns about fuel availability and pricing in the coming months.
